--- page 1 ---
(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Code : 3268
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
GLOBAL  OFFERING
MeiG Smart Technology Co., Ltd.
ʮ̡
MeiG Smart Technology Co., Ltd.
ʮ̡
MeiG Smart Technology Co., Ltd.
ʮ̡


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If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
MeiG Smart Technology Co., Ltd.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the
Global Offering
: 35,000,000 H Shares (subject to the Offer Size
Adjustment Option)
Number of Hong Kong Offer Shares : 3,500,000 H Shares (subject to reallocation and
the Offer Size Adjustment Option)
Number of International Offer Shares : 31,500,000 H Shares (subject to reallocation and
the Offer Size Adjustment Option)
Maximum Offer Price : HK$28.86 per H Share, plus brokerage of 1%,
SFC transaction levy of 0.0027%, Stock
Exchange trading fee of 0.00565% and AFRC
transaction levy of 0.00015% (payable in full
on application in Hong Kong dollars and
subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 3268
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited
take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies and Available on
Display — Documents Delivered to the Registrar of Companies” in Appendix VII, has been registered by the Registrar of Companies in Hong Kong
as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong).
Neither the Securities and Futures Commission of Hong Kong nor the Registrar of Companies in Hong Kong takes any responsibility as to the
contents of this prospectus or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters)
and us on or around Friday, March 6, 2026. The Offer Price will be no more than HK$28.86 per Offer Share. If, for any reason, the Offer Price is
not agreed by 12:00 noon on Friday, March 6, 2026, the Global Offering will not proceed and will lapse.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Hong Kong Offer
Shares at any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. See “Structure
of the Global Offering” and “How to Apply for Hong Kong Offer Shares” for further details.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) if certain grounds arise prior to 8:00 a.m. on the Listing Date. See
“Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for termination” for further details.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law of the United States and may not
be offered or sold within or to the United States, except in transactions exempt from, or not subject to, the registration requirements of the U.S.
Securities Act. The Offer Shares are being offered and sold outside the United States in offshore transactions in accordance with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus
to the public.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.meigsmart.com . If you require
a printed copy of this prospectus, you may download and print from the website addresses above.
IMPORTANT
February 27, 2026


--- page 3 ---
IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public
Offering. We will not provide printed copies of this prospectus to the public.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ”
section, and our website at www.meigsmart.com . If you require a printed copy of this
prospectus, you may download and print from the website addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via the White Form eIPO service at www.eipo.com.hk
;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC Nominees
to apply on your behalf by instructing your broker or custodian who is an HKSCC
Participant to give electronic application instructions via HKSCC’s FINI system to
apply for the Hong Kong Offer Shares on your behalf.
We will not provide any physical channels to accept any application for the Hong Kong
Offer Shares by the public. The contents of the electronic version of this prospectus are
identical to the printed prospectus as registered with the Registrar of Companies in Hong Kong
pursuant to section 342C of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients or
principals, as applicable, that this prospectus is available online at the website addresses above.
See “How to Apply for Hong Kong Offer Shares” for further details of the procedures
through which you can apply for the Hong Kong Offer Shares electronically.
IMPORTANT


--- page 4 ---
Your application through the White Form eIPO service or the HKSCC EIPO channel must
be made for a minimum of 100 Hong Kong Offer Shares and in multiples of that number of Hong
Kong Offer Shares as set out in the table below. No application for any other number of Hong
Kong Offer Shares will be considered and such an application is liable to be rejected.
If you are applying through the White Form eIPO service, you may refer to the table below
for the amount payable for the number of Shares you have selected. You must pay the respective
amount payable on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, your broker or custodian may require
you to pre-fund your application in such amount as determined by the broker or custodian, based
on the applicable laws and regulations in Hong Kong. You are responsible for complying with any
such pre-funding requirement imposed by your broker or custodian with respect to the Hong Kong
Offer Shares you applied for.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
HK$ HK$ HK$ HK$
100 2,915.10 2,000 58,302.11 10,000 291,510.53 300,000 8,745,315.94
200 5,830.22 2,500 72,877.64 20,000 583,021.06 400,000 11,660,421.25
300 8,745.31 3,000 87,453.16 30,000 874,531.60 500,000 14,575,526.56
400 11,660.42 3,500 102,028.69 40,000 1,166,042.12 600,000 17,490,631.85
500 14,575.53 4,000 116,604.21 50,000 1,457,552.65 700,000 20,405,737.16
600 17,490.64 4,500 131,179.74 60,000 1,749,063.19 800,000 23,320,842.48
700 20,405.74 5,000 145,755.27 70,000 2,040,573.72 900,000 26,235,947.79
800 23,320.83 6,000 174,906.32 80,000 2,332,084.25 1,000,000 29,151,053.10
900 26,235.95 7,000 204,057.36 90,000 2,623,594.78 1,250,000 36,438,816.38
1,000 29,151.05 8,000 233,208.42 100,000 2,915,105.31 1,500,000 43,726,579.66
1,500 43,726.58 9,000 262,359.48 200,000 5,830,210.62 1,750,000
(1) 51,014,342.93
Notes:
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined
in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy are
paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock Exchange on behalf of
the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
IMPORTANT


--- page 5 ---
If there is any change in the following expected timetable of the Hong Kong Public
Offering, our Company will issue an announcement to be published on the website of the Stock
Exchange at www.hkexnews.hk
and the website of our Company at www.meigsmart.com .
Date (1)
Hong Kong Public Offering commences ...................................9 : 0 0a . m .o n
Friday, February 27, 2026
Latest time to complete electronic applications
under White Form eIPO service through the
designated website at www.eipo.com.hk (2) ..............................1 1 : 3 0a . m .o n
Thursday, March 5, 2026
Application lists of the Hong Kong Public Offering open (3) ...................1 1 : 4 5a . m .o n
Thursday, March 5, 2026
Latest time to (a) complete payment of White Form eIPO
applications by effecting internet banking transfer(s) or
PPS payment transfer(s) and (b) give electronic
application instructions to HKSCC
(4) .................................1 2 : 0 0 noon on
Thursday, March 5, 2026
If you are instructing your broker or custodian who is a HKSCC Participant will submit
electronic application instructions on your behalf through HKSCC’s FINI system in accordance
with your instruction, you are advised to contact your broker or custodian for the earliest and latest
time for giving such instructions, as this may vary by broker or custodian .
Application lists of the Hong Kong Public Offering close
(3) ..................1 2 : 0 0 noon on
Thursday, March 5, 2026
Expected Price Determination Date (5) ...................................b y1 2 : 0 0 noon,
Friday, March 6, 2026
EXPECTED TIMETABLE (1)
–i–


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Announcement of the final Offer Price, the results of applications
in the Hong Kong Public Offering, the level of indications of
interest in the International Offering and the basis of allocation
of the Hong Kong Offer Shares under the Hong Kong Public
Offering to be published on the website of the Stock Exchange
at www.hkexnews.hk
and the website of our Company at
www.meigsmart.com (6) ..................................n ol a t e rt h a n1 1 : 0 0p . m .o n
Monday, March 9, 2026
Results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of channels,
including:
(1) A full announcement of the Hong Kong Public Offering
to be published on the website of the Stock Exchange
at www.hkexnews.hk
and the website of our
Company at www.meigsmart.com (6) ................n ol a t e rt h a n1 1 : 0 0p . m .o n
Monday, March 9, 2026
(2) Results of allocations in the Hong Kong Public Offering
will be available at www.iporesults.com.hk
(alternatively: www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function on a
24-hour basis from ........................................1 1 : 0 0p . m .o n
Monday, March 9, 2026 to
12:00 midnight on
Sunday, March 15, 2026
(3) Allocation results telephone enquiry by calling
+852 2862 8555 .........................b e t ween 9:00 a.m. and 6:00 p.m. on
Tuesday, March 10, 2026 to
Friday, March 13, 2026
Despatch of H Share certificates in respect of wholly or
partially successful applications, or deposit of
H Share certificate into CCASS pursuant to
Hong Kong Public Offering, on or before
(7)(9) .................... Monday, March 9, 2026
EXPECTED TIMETABLE (1)
–i i–


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Dispatch/collection of refund cheques and White Form
e-Refund payment instructions in respect of (i) wholly or
partially successful applications (if applicable); and
(ii) wholly or partially unsuccessful applications pursuant
to the Hong Kong Public Offering on or before
(8)(9) ..............T u e sday, March 10, 2026
Dealings in H Shares on the Stock Exchange
expected to commence at 9:00 a.m. on ................................a t9 : 0 0a . m .o n
Tuesday, March 10, 2026
The application for the Hong Kong Offer Shares will commence on Friday, February 27,
2026 through Thursday, March 5, 2026, being longer than normal market practice of three and a
half days. Investors should be aware that the dealings in the H Shares on the Hong Kong Stock
Exchange are expected to commence on Tuesday, March 10, 2026.
Notes:
(1) All dates and times refer to Hong Kong local dates and times, except as otherwise stated.
(2) You will not be permitted to submit your application to the White Form eIPO Service Provider through the
designated website at www.eipo.com.hk
after 11:30 a.m. on the last day for submitting applications. If you have
already submitted your application and obtained an application reference number from the designated website on or
before 11:30 a.m., you will be permitted to continue the application process (by completing payment of application
monies) until 12:00 noon on the last day for submitting applications, when the application lists close.
(3) If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or Extreme
Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, March 5, 2026, the
application lists will not open or close on that day. See “How to Apply for Hong Kong Offer Shares — E. Severe
Weather Arrangements” in this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by instructing your broker or custodian to give electronic
application instructions to HKSCC on your behalf via FINI should see “How to Apply for Hong Kong Offer
Shares — A. Application for Hong Kong Offer Shares — 2. Application Channels” in this prospectus.
(5) The Price Determination Date is expected to be on or before Friday, March 6, 2026, and in any event, not later than
12:00 noon on Friday, March 6, 2026. If, for any reason, the Offer Price is not agreed between the Overall
Coordinators and us by 12:00 noon on Friday, March 6, 2026, the Global Offering will not proceed and will lapse.
(6) None of the websites or any of the information contained on the websites forms part of this prospectus.
(7) H Share certificates for the Offer Shares will become valid evidence of title at 8:00 a.m. on the Listing Date
provided that (i) the Global Offering has become unconditional in all respects; and (ii) none of the Underwriting
Agreements have been terminated in accordance with its terms.
EXPECTED TIMETABLE (1)
– iii –


--- page 8 ---
(8) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s Hong Kong identity
card number or passport number, or, if the application is made by joint applicants, part of the Hong Kong identity
card number or passport number of the first-named applicant, provided by the applicant(s) may be printed on the
refund cheque, if any. Such data would also be transferred to a third party for refund purposes. Banks may require
verification of an applicant’s Hong Kong identity card number or passport number before encashment of the refund
cheque. Inaccurate completion of an applicant’s Hong Kong identity card number or passport number may
invalidate or delay encashment of the refund cheque.
(9) Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to the
section headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of Share Certificates and
Refund of Application Monies” in this prospectus for details.
For applicants who apply through the White Form eIPO service and paid the application monies from a single
bank account, White Form e-Refund payment instructions (if any) will be dispatched to their application payment
bank account. For applicants who apply through the White Form eIPO service and used multi-bank accounts to
pay the application monies, refund cheque (if any) will be dispatched to the address specified in their electronic
application instruction to the White Form eIPO Service Provider at their own risk.
Any uncollected H Share certificates and/or refund cheques will be dispatched by ordinary post, at the applicants’
risk, to the addresses specified in the relevant applications.
Further information is set out in the section headed “How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of Share Certificates and Refund of Application Monies” in this prospectus.
The above expected timetable is a summary only. You should read carefully the sections
headed “Underwriting”, “Structure of the Global Offering” and “How to Apply for Hong Kong
Offer Shares” in this prospectus for details of the structure and conditions of the Global Offering,
as well as the application procedures for Hong Kong Public Offering.
EXPECTED TIMETABLE (1)
–i v–


--- page 9 ---
IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by our Company solely in connection with the Hong Kong
Public Offering and does not constitute an offer to sell or a solicitation of an offer to buy any
security other than the Hong Kong Offer Shares offered by this prospectus pursuant to the
Hong Kong Public Offering. This prospectus may not be used for the purpose of, and does
not constitute, an offer or invitation in any other jurisdiction or in any other circumstances.
No action has been taken to permit a public offering of the Offer Shares in any jurisdiction
other than Hong Kong and no action has been taken to permit the distribution of this
prospectus in any jurisdiction other than Hong Kong. The distribution of this prospectus and
the offering of the Offer Shares in other jurisdictions are subject to restrictions and may not
be made except as permitted under the applicable securities laws of such jurisdictions
pursuant to registration with or authorization by the relevant securities regulatory authorities
or an exemption therefrom.
Y ou should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not
authorized anyone to provide you with information that is different from what is contained in
this prospectus. Any information or representation not made in this prospectus must not be
relied on by you as having been authorized by us, the Sole Sponsor, the Overall Coordinators,
the Joint Global Coordinators, the Capital Market Intermediaries, the Joint Bookrunners,
Joint Lead Managers, the Underwriters, any of our or their respective directors, officers,
employees, agents, or representatives or any other person or party involved in the Global
Offering.
Page
Expected Timetable ..................................................... i
Contents .............................................................. v
Summary ............................................................. 1
Definitions ............................................................ 2 5
Glossary of Technical Terms .............................................. 3 6
CONTENTS
–v–


--- page 10 ---
Page
Forward-Looking Statements ............................................. 4 4
Risk Factors ........................................................... 4 6
Waivers and Exemptions ................................................. 8 7
Information About this Prospectus and the Global Offering ..................... 1 0 3
Directors and Parties Involved in the Global Offering ......................... 1 0 7
Corporate Information .................................................. 1 1 5
Industry Overview ...................................................... 1 1 8
Regulatory Overview .................................................... 1 4 6
History and Corporate Structure .......................................... 1 7 1
Business .............................................................. 1 8 0
Financial Information ................................................... 2 9 0
Relationship with Our Controlling Shareholders .............................. 3 4 9
Share Capital .......................................................... 3 5 3
Substantial Shareholders ................................................. 3 5 6
Directors and Senior Management ......................................... 3 5 8
Cornerstone Investors ................................................... 3 6 9
Future Plans and Use of Proceeds ......................................... 3 7 9
Underwriting .......................................................... 3 8 7
Structure of the Global Offering .......................................... 4 0 0
CONTENTS
–v i–


--- page 11 ---
Page
How to Apply for Hong Kong Offer Shares .................................. 4 1 3
Appendix I — Accountants’ Report ..................................... I - 1
Appendix IIA — Unaudited Pro Forma Financial Information .................. I I A - 1
Appendix IIB — Profit Estimate for Y ear Ended December 31, 2025 ............ I I B - 1
Appendix III — Taxation and Foreign Exchange ............................ III-1
Appendix IV — Summary of Principal Legal and Regulatory Provisions ......... I V - 1
Appendix V — Summary of the Articles of Association ...................... V - 1
Appendix VI — Statutory and General Information ......................... V I - 1
Appendix VII — Documents Delivered to The Registrar of Companies and
Available on Display ................................... V II-1
CONTENTS
–v i i–


--- page 12 ---
This summary aims to give you an overview of the information contained in this
prospectus. As it is a summary, it does not contain all the information that may be important to
you. You should read this prospectus in its entirety before you decide to invest in the Offer
Shares. There are risks associated with any investment. Some of the particular risks in investing
in the Offer Shares are set fort in the section headed “Risk Factors” in this prospectus. You
should read that section carefully before you decide to invest in the Offer Shares.
OVERVIEW
About Us
We are a leading provider of wireless communication modules and solutions, with a focus on
smart modules, particularly high-computing-power smart modules. Our modules and solutions are
widely applied across the general internet of things (“ IoT”), Intelligent Connected Vehicle (“ ICV”)
and wireless broadband sectors. According to Frost & Sullivan, we ranked fourth in the global
wireless communication module industry in terms of revenue from wireless communication module
business in 2024, accounting for 6.4% of the global market share. According to the same source,
the global wireless communication module market is highly concentrated, with the three largest
players accounting for 65.7% of global market revenue in 2024 (the largest player alone holding a
42.7% market share), compared to our 6.4% market share despite ranking fourth.
Wireless communication modules are products typically equipped with communication
functions designed to enable the transmission and processing of large volumes of data over long
distances. Our portfolio of wireless communication modules includes:
 Smart modules , which are equipped with system-on-chips (“ SoC”) processors and
smart operating systems, and can be further categorized into:
— High-computing-power smart modules , primarily designed to run complex
algorithms and support on-device AI applications; and
— Regular smart modules , primarily designed for smart applications such as custom
software and multi-media functions.
 Data transmission modules , primarily designed for data communication, security and
high-throughput data exchange.
SUMMARY
–1–


--- page 13 ---
Leveraging our wireless communication module technologies, we develop customized
solutions tailored to the specific requirements of various application sectors, addressing the diverse
needs of our customers. They represent value added beyond the provision of hardware, as they are
integrated offerings that combine our module with a layer of customized software, hardware and
application-specific R&D services. This includes complex system-level software and firmware
customization to enable unique features and optimize performance, as well as provide integral
R&D services to co-develop and ensure the integration of the final tailored solution into the
customer’s specific application ecosystem. By delivering a functional subsystem or a ready-to-use
end product, rather than just a standalone component, we solve complex integration challenges for
our customers, reducing their development cycles and technical risks, thereby accelerating their
time-to-market. During the Track Record Period, customized products and solutions for customers
represented a substantial portion of our revenue, accounting for 78.4%, 84.5%, 86.3% and 90.5%
of our revenue for the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2025.
Our wireless communication modules and solutions are widely applied across general IoT,
ICV and wireless broadband sectors, and we are actively expanding into emerging on-device AI
applications such as robots. Our modules and solutions are widely used in a variety of end
products such as POS machines, 5G barcode-scanner smart PDA solutions for logistics and
warehouses, industrial AI boxes for quality checks and production facility oversight, intelligent
cockpits and T-Boxes and mobile WiFi terminals.
OUR STRENGTHS
We believe the following strengths position us well to capitalize on future opportunities and
deliver continued growth: (i) being a globally leading wireless communication module and solution
provider; (ii) technical expertise and continuous innovation driving differentiated technological
advantages; (iii) balanced development across three core sectors, driving diversified market
coverage; (iv) long-term partnerships with leading global customers, enhancing market
competitiveness; and (v) a pragmatic and solid corporate culture, visionary management team and
diverse talent pool supporting sustainable development.
OUR STRATEGIES
We intend to implement the following strategies: (i) continue investing in R&D to drive
product iteration and industry expansion; (ii) build and strengthen global sales and supply chain
networks to accelerate international expansion; and (iii) expand along the industry value chain and
pursue strategic mergers and acquisitions to create new growth opportunities.
SUMMARY
–2–


--- page 14 ---
OUR PRODUCTS AND SOLUTIONS
The following table sets forth a summary of our module products and solutions:
Product Key features and functions Key components
(i) Smart module:
(a) Regular smart module ..  Equipped with smart operating systems
such as Android;
 Supports features such as multi-media,
multi-camera and multi-display; and
 Computing capability at lower than 8
TOPS(1)
 SoC;
 Memory chip
(3);
 Radio frequency chip (4);
 Printed circuit board
(“PCB”)(5); and
 Power management chip (6)
(b) High-computing-power
smart module ........
 Equipped with smart operating systems
such as Android;
 More suitable for deployment of advanced
AI models (especially on local devices)
that require high computing power and
large memory; and
 Computing capability at equal to or higher
than 8 TOPS
 SoC with stronger neural
processing unit (“ NPU”) and
AI acceleration performance;
 Memory chip;
 Radio frequency chip;
 PCB; and
 Power management chip
(ii) Data transmission
module: ...........
 Cellular wireless connection from 2G to
5G
(2);
 Not equipped with smart operating systems
like Android; and
 No high-computing-power capability, and
typically not selected for their computing
power capability
 Baseband chip
(7);
 Memory chip;
 Radio frequency chip;
 PCB; and
 Power management chip
Notes:
(1) According to Frost & Sullivan, 8 TOPS is considered as an industry norm as the threshold for
high-computing-power smart modules, enabling stable deployment and effective commercialization in mainstream
scenarios such as AI model deployment in intelligent cockpits and on-device generative image models for extended
reality devices.
(2) Data transmission modules have cellular wireless communication capability, while smart modules may or may not
have cellular wireless communication capability.
(3) Memory chip stores data and software program instructions required for module operations.
(4) Radio frequency chip converts digital signals to radio frequency signals and vice versa for wireless communication.
SUMMARY
–3–


--- page 15 ---
(5) PCB serves as the physical platform with electrical connections for integrating and supporting electronic
components in a module or device.
(6) Power management chip regulates and distributes power efficiently to ensure stable and optimal operation of the
module’s components in electronic devices.
(7) Baseband chip processes and manages digital signals for communication protocols and data transmission.
We also provide our customers with solutions based on our module products and/or module
technologies. Our solutions are typically provided in the forms of (i) printed circuit board
assemblies (“ PCBAs ”), which are fully assembled circuit boards that typically integrate (a)
firmware or embedded software for specific functions, and (b) electronic components such as chips
and modules; and (ii) end products, which are ready-to-use products embedding PCBAs, such as
handheld devices.
The following table sets forth a breakdown of our revenue by module and solution type
during the Track Record Period:
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Modules and solutions ........ 2,227,999 96.6 2,048,987 95.4 2,808,563 95.5 2,085,672 95.6 2,738,538 97.1
(i) Smart modules and solutions ... 957,351 41.5 1,218,424 56.7 1,850,696 62.9 1,394,068 63.9 1,865,127 66.1
(a) Regular smart modules and
solutions ........... 922,296 40.0 898,167 41.8 832,578 28.3 751,591 34.5 899,984 31.9
(b) High-computing-power smart
modules and solutions ... 35,055 1.5 320,257 14.9 1,018,118 34.6 642,477 29.4 965,143 34.2
(ii) Data transmission modules and
solutions ............. 1,270,648 55.1 830,563 38.7 957,867 32.6 691,604 31.7 873,411 31.0
Others (1) ................ 77,933 3.4 98,349 4.6 132,811 4.5 96,356 4.4 82,750 2.9
Total .................. 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Note:
(1) Primarily including sales of electronic components.
Revenue generated from sales of our smart modules and solutions increased by 27.3% from
RMB957.4 million in 2022 to RMB1,218.4 million in 2023, primarily attributable to an increase in
revenue generated from sales of our high-computing-power smart modules and solutions as a result
of an increase in downstream demand in the ICV application sector, especially in the intelligent
cockpit application scenario. Revenue generated from sales of our data transmission modules and
solutions decreased by 34.6% from RMB1,270.6 million in 2022 to RMB830.6 million in 2023,
primarily due to a decrease in the average selling price of our data transmission modules and
SUMMARY
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solutions as a result of a decrease in the sales proportion of our data transmission modules and
solutions used in wireless broadband products of overseas carriers, which generally had a higher
selling price. The higher selling price was primarily due to (i) relatively less intense competition;
and (ii) greater customer acceptance for products with high R&D inputs and customized service in
overseas markets.
Revenue generated from sales of our smart modules and solutions increased by 51.9% from
RMB1,218.4 million in 2023 to RMB1,850.7 million in 2024, primarily attributable to an increase
in revenue generated from sales of our high-computing-power smart modules and solutions as a
result of an increase in downstream demand in the ICV application sector. Revenue generated from
sales of our data transmission modules and solutions increased by 15.3% from RMB830.6 million
in 2023 to RMB957.9 million in 2024, primarily attributable an increase in the average selling
price of our data transmission modules as a result of (i) an increase in the sales proportion of 4G
data transmission modules with a higher selling price sold to certain customers; and (ii) an
increase in the sales volume of our 5G data transmission modules and solutions, thus contributing
to the increase in revenue generated from sales of 5G data transmission modules.
Our revenue generated from sales of our smart modules and solutions increased by 33.8%
from RMB1,394.1 million in the nine months ended September 30, 2024 to RMB1,865.1 million in
the nine months ended September 30, 2025, primarily attributable to (i) an increase in sales of our
high-computing-power smart modules and solutions as a result of an increase in downstream
demand in the ICV application sector, especially in the intelligent cockpit application scenario; and
(ii) an increase in revenue generated from the sales of our regular smart modules as a result of an
increase in the sales volume of our regular smart modules primarily attributable to higher sales
volume of smart modules applied in the general IoT sector. Revenue generated from sales of our
data transmission modules and solutions increased by 26.3% from RMB691.6 million in the nine
months ended September 30, 2024 to RMB873.4 million in the nine months ended September 30,
2025, primarily due to an increase in the average selling price of our data transmission modules as
a result of an increase in the sales of our 5G data transmission modules and solutions with a high
selling price as a result of our expanded customer base.
Our gross profit margin decreased from 15.8% in the nine months ended September 30, 2024
to 12.6% in the nine months ended September 30, 2025, primarily due to decreases in the gross
profit margin of (i) our high-computing-power smart modules and solutions due to an increase in
the unit cost of sales of our high-computing-power smart modules and solutions as a result of an
increase in the purchase price of raw materials, such as memory chips. While the average selling
price of high-computing-power smart modules and solutions increased by 11.7% from RMB1,121.2
in the nine months ended September 30, 2024 to RMB1,252.9 in the same period in 2025, the
average cost increased by 21.3% from RMB896.3 to RMB1,087.4. The more significant increase
rate of average cost outweighed the increase in average selling price, resulting in the overall
decline in the gross profit margin; and (ii) our data transmission modules and solutions due to an
increase in the sales proportion of our data transmission modules and solutions sold to overseas
carriers in Japan with a lower gross profit margin. These data transmission modules and solutions
had lower gross profit margins because we adopted competitive pricing to secure large volume
SUMMARY
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orders at lower initial margins, which we believe is crucial for maintaining our market share and
strengthening customer relationships. Such competitive pricing strategy is a short-term measure,
adopted primarily for the purpose of securing well-known customers or entering new markets, and
we do not adopt competitive pricing as a long-term strategy.
The following table sets forth a breakdown of our revenue generated in terms of application
sector during the Track Record Period:
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
General IoT ............. 1,004,868 43.6 970,963 45.2 1,050,531 35.7 924,712 42.4 1,156,204 41.0
ICV ................ 342,173 14.8 593,629 27.6 1,220,869 41.5 788,318 36.1 986,903 35.0
Wireless broadband .......... 880,957 38.2 484,395 22.6 537,164 18.3 372,642 17.1 595,431 21.1
Others (1) ............... 77,933 3.4 98,349 4.6 132,811 4.5 96,356 4.4 82,750 2.9
Total ................ 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Note:
(1) Primarily including sales of electronic components.
Please see “Business — Application of our Products and Solutions” for details on the
application sectors of our products and solutions.
The following table sets forth the sales volume of our smart and data transmission modules
and solutions by application sectors for the periods indicated:
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
General IoT ...................... 8,489 9,143 7,709 5,542 6,399
ICV ............................ 684 1,092 2,420 1,946 1,951
Wireless Broadband ................. 2,702 1,634 2,039 1,475 1,871
SUMMARY
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The following table sets forth the average selling price of our smart and data transmission
modules and solutions by application sectors for the periods indicated:
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB RMB RMB RMB RMB
General IoT ...................... 118.4 106.2 136.3 166.9 180.7
ICV ............................ 500.4 543.5 504.5 405.2 505.9
Wireless Broadband ................. 326.1 296.5 263.4 252.7 318.3
Comparison between the nine months ended September 30, 2025 and 2024
General IoT. Our sales volume in the general IoT sector increased by 15.5% from 5.5
million units in the nine months ended September 30, 2024 to 6.4 million units in the
corresponding period in 2025, primarily due to growth in demand from customers that provide IoT
equipment for industrial and consumer applications, such as increasing demand for intelligent
retail equipment. The average selling price for this sector increased by 8.3% from RMB166.9 to
RMB180.7 over the same period. This increase was primarily attributable to a shift in our product
mix towards higher-value products such as customized smart modules, which typically command a
higher average selling price.
ICV . Our sales volume in the ICV sector remained relatively stable. The average selling price
for this sector increased significantly by 24.9% from RMB405.2 to RMB505.9, primarily because
we experienced a substantial increase in sales of our 5G high-computing-power smart modules for
intelligent cockpit applications, coupled with a decrease in sales of our lower price 4G data
transmission modules used in T-Box applications.
Wireless Broadband. Our sales volume in the wireless broadband sector increased by 26.8%
from 1.5 million units in the nine months ended September 30, 2024 to 1.9 million units in the
same period in 2025, primarily due to our successful market expansion in overseas markets,
particularly in Japan. The average selling price for this sector increased from RMB252.7 to
RMB318.3 over the same period, primarily due to an increase in the sales of our 5G data
transmission modules and solutions with a high selling price, reflecting our expanded customer
base.
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Comparison between 2024 and 2023
General IoT. Our sales volume in the general IoT sector decreased from 9.1 million units in
2023 to 7.7 million units in 2024, primarily due to a lower sales volume of lower price 4G data
transmission modules used in this sector. However, average selling price increased, as explained
below, leading to an overall revenue increase. The average selling price for this sector increased
by 28.3% from RMB106.2 in 2023 to RMB136.3 in 2024, primarily due to a change in our product
mix, with a higher proportion of revenue being generated from higher price customized smart
modules sold to overseas customers.
ICV . Our sales volume in the ICV sector increased by 121.6% from 1.1 million units in 2023
to 2.4 million units in 2024, attributable to the strong and growing downstream demand for our
products in the ICV sector, particularly for intelligent cockpit scenarios. The average selling price
for this sector decreased by 7.2% from RMB543.5 in 2023 to RMB504.5 in 2024. This decrease
was mainly due to a shift in product mix, as we recorded a significant increase in sales of lower
price 4G data transmission modules for T-Box applications, which reduced the overall average
selling price for the sector.
Wireless Broadband. Our sales volume in the wireless broadband sector increased by 24.8%
from 1.6 million units in 2023 to 2.0 million units in 2024, driven by an expansion of our
customer base. The average selling price for this sector decreased by 11.2% from RMB296.5 in
2023 to RMB263.4 in 2024, primarily due to a decrease in the sales proportion of higher price
products that were sold indirectly to overseas carriers.
Comparison between 2023 and 2022
General IoT. Our sales volume in the general IoT sector remained relatively stable. The
average selling price for this sector decreased by 10.3% from RMB118.4 in 2022 to RMB106.2 in
2023. This was primarily due to a shift in product mix towards a higher proportion of lower price
4G data transmission modules used for industrial connectivity applications for certain customers.
ICV . Our sales volume in the ICV sector increased by 59.6% from 0.7 million units in 2022
to 1.1 million units in 2023, reflecting growing downstream demand. The average selling price for
this sector increased by 8.6% from RMB500.4 in 2022 to RMB543.5 in 2023. This increase was
mainly because a major customer for intelligent cockpit applications shifted from procuring our
products through a distributor to a direct sales model with us, which resulted in a higher average
selling price being recorded by the Company.
SUMMARY
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Wireless Broadband. Our sales volume in the wireless broadband sector decreased by 39.5%
from 2.7 million units in 2022 to 1.6 million units in 2023, primarily because we fulfilled a
majority of the data transmission modules and solutions in 2022, which resulted in a lower volume
of orders fulfilled in 2023. The ASP for this sector decreased by 9.1% from RMB326.1 in 2022 to
RMB296.5 in 2023. The decrease was principally due to a change in product mix between the two
years, driven by customer demand cycles. In 2022, our sales volume was weighted towards
higher-value, feature-rich data transmission solutions delivered for certain customers, which carry
a higher average selling price. Our sales in 2023 comprised a smaller proportion of such products,
resulting in a lower blended average selling price for the year.
The table below sets forth the breakdown of our revenue by geographic region (in terms of
the place of registration of our customers) for the periods indicated:
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
China ................ 1,760,368 76.3 1,482,375 69.0 2,138,448 72.7 1,613,043 73.9 1,858,424 65.9
East Asia (1) ............. 272,068 11.8 305,953 14.2 285,931 9.7 205,064 9.4 507,267 18.0
United States ............. 106,344 4.6 72,428 3.4 222,264 7.6 122,886 5.6 240,236 8.5
Europe ............... 96,037 4.2 164,417 7.7 107,625 3.7 86,878 4.0 88,188 3.1
Others (2) ............... 71,115 3.1 122,163 5.7 187,106 6.4 154,157 7.1 127,174 4.5
Total ................ 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Notes:
(1) Excluding China.
(2) Primarily including Samoa and Dominican Republic.
OUR BUSINESS MODEL
Under our business model, we focus on the R&D and design of our modules and solutions,
and we outsource the manufacturing to third-party EMS providers. According to Frost & Sullivan,
it is in line with industry practices in the wireless communication module industry in China to
outsource manufacturing to EMS providers.
SUMMARY
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The following diagram illustrates our business model:
Our Suppliers
Raw material
suppliers EMS providers
Our Group
Direct sales
customers Distributors
Our Customers
3. Finished products(2)
2. Raw materials(1)
Product, raw materials and manufacturing specifications flow
Fund flow
Third parties
1. Manufacturing specifications
Notes:
(1) During the Track Record Period, our raw material suppliers directly provided raw materials to our EMS providers.
Our raw material suppliers may arrange the shipments of the raw materials.
(2) During the Track Record Period, our finished products were generally delivered directly from EMS providers to
locations designated by our customers.
OUR CORE TECHNOLOGICAL CAPABILITIES
Our core technological capabilities enable us to develop, integrate and customize modules
and solutions that cater to diverse industries. Through years of R&D efforts, we have built our
proprietary technologies upon three fundamental pillars: (i) smart module design and development;
(ii) customization capabilities; and (iii) accumulation of knowhow in core sectors.
SUMMARY
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OUR CUSTOMERS AND SUPPLIERS
In 2022, 2023, 2024 and the nine months ended September 30, 2025, revenue generated from
our five largest customers in each year/period of the Track Record Period amounted to RMB701.2
million, RMB847.2 million, RMB1,388.8 million and RMB1,398.0 million, respectively,
accounting for 30.4%, 39.5%, 47.2% and 49.5% of our total revenue in the same year/period,
respectively. Revenue from our largest customer in each year/period of the Track Record Period
accounted for 8.3%, 24.3%, 32.5% and 28.2% of our total revenue, respectively. For further
details, please see “Business — Our Customers.”
During the Track Record Period, our suppliers primarily consisted of raw material suppliers
and EMS providers. In 2022, 2023, 2024 and the nine months ended September 30, 2025,
purchases from our five largest suppliers in each year/period of the Track Record Period amounted
to RMB1,159.9 million, RMB962.3 million, RMB1,720.7 million and RMB1,513.9 million,
respectively, representing 57.8%, 53.3%, 63.8% and 56.7% of our total purchases, respectively. In
addition, purchases from our largest supplier in each year/period of the Track Record Period
accounted for 37.6%, 26.5%, 34.1% and 34.9% of our total purchases in 2022, 2023, 2024 and the
nine months ended September 30, 2025, respectively. For further details, please see “Business —
Our Suppliers.”
Price volatility in memory chips, which are a key component in most of our modules,
remained volatile and cyclical. According to Frost & Sullivan, the market for memory chips is
known for its cyclical and often sharp price fluctuations. For example, the price of memory chips
experienced a period of decline in 2022 and 2023 due to market overcapacity and weak consumer
demand, and began to rebound in 2024 and 2025, driven by factors including surging demand for
AI servers and production cuts by major manufacturers. The current round of price increases is
expected to continue into the first half of 2026. See “Business — Raw Materials and
Procurement.”
COMPETITION
The global wireless communication module industry in which we operate is highly
competitive and characterized by rapid technological evolvement, fast changes in customer
demands and preferences, frequent introduction of new products and solutions and the constant
emergence of new industry standards and practices. In addition, the global wireless communication
module industry is marked by a high level of concentration. We compete with other players in the
industry whose businesses include sales of modules and solutions. Please see “Industry Overview.”
SUMMARY
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SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Summary of Consolidated Statements of Profit or Loss and Other Comprehensive Income
The following table sets out a summary of our consolidated statements of profit or loss and
other comprehensive income for the years/periods indicated:
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Revenue .............. 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Cost of sales ............. (1,900,557) (82.4) (1,751,198) (81.6) (2,456,712) (83.5) (1,837,399) (84.2) (2,464,709) (87.4)
Gross profit ............ 405,375 17.6 396,138 18.4 484,662 16.5 344,629 15.8 356,579 12.6
Profit for the year/period ...... 126,615 5.5 62,609 2.9 134,375 4.6 90,498 4.1 113,170 4.0
Non-IFRS Measure
We also use adjusted net profit (non-IFRS measure) in evaluating our operating results, which
is not required by or presented in accordance with IFRS, as an additional financial measure to
supplement our consolidated financial statements, which are presented in accordance with IFRS.
We believe that the non-IFRS measure provides useful information to investors and others in
understanding and evaluating our consolidated results of operations in the same manner as they
help our management. We define adjusted net profit (non-IFRS measure) as profit for the
year/period adjusted for (i) share-based payment expenses, which are non-cash in nature; and (ii)
listing expenses, which relate to the Global Offering. However, our presentation of adjusted net
profit (non-IFRS measure) may not be comparable to similarly titled measures presented by other
companies. The use of such non-IFRS measure has limitations as an analytical tool, and you
should not consider it in isolation from, or as a substitute for an analysis of, our results of
operations or financial condition as reported under IFRS.
SUMMARY
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The following table reconciles adjusted net profit (non-IFRS measure) to our profit for the
years/periods, presented in accordance with IFRS, for the periods indicated:
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit for the year/period ..... 126,615 62,609 134,375 90,498 113,170
Add:
Share-based payment expenses .. 8,455 2,777 11,118 5,537 16,535
Listing expenses ............. ———— 7 6 7
Adjusted net profit (non-IFRS
measure) ................. 135,070 65,386 145,493 96,035 130,472
Our profit for the year decreased by 50.6% from RMB126.6 million in 2022 to RMB62.6
million in 2023, primarily due to (i) a decrease in revenue due to a decrease in sales of our data
transmission modules and solutions; (ii) an increase in selling and marketing expenses due to an
increase in consultation expenses, as we paid more service fees to business consultant partners
who are typically companies with relevant local industry expertise and established track records
and network within the relevant local markets, and with the necessary technical understanding of
our product and solution offerings to effectively communicate with potential customers. During the
Track Record Period, such business consulting partners assisted us with (a) securing orders from
certain customers engaged in the POS machine business, as well as (b) increasing sales of our
products in overseas markets. Pursuant to our cooperation arrangements with these business
consulting partners, we pay service fees based on the scope and performance of their services.
According to Frost & Sullivan, engaging such business consultant partners to expand overseas
markets is in line with industry practice. As a result, we paid more service fees to the business
consultant partners; and (iii) there was an increase in research and development expenses due to an
increase in employee compensation as a result of an increase in the average salaries paid to our
R&D and technology team, as well as depreciation and amortization.
Our profit for the year increased by 114.6% from RMB62.6 million in 2023 to RMB134.4
million in 2024, primarily due to (i) an increase in revenue attributable to an increase in sales of
smart modules and solutions; and (ii) our operating expenses, including selling and marketing
expenses, administrative expenses and research and development expenses, remaining relatively
stable as a result of operational efficiency and economies of scale achieved through business
expansion.
SUMMARY
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Our profit for the year/period increased from RMB90.5 million for the nine months ended
September 30, 2024 to RMB113.2 million for the nine months ended September 30, 2025,
primarily due to an increase in total revenue, particularly an increase in revenue generated from
sales of smart modules and solutions, as well as selling and marketing, administrative and R&D
expenses remaining relatively stable as a result of operational efficiency and economies of scale
achieved through business expansion.
Summary of Consolidated Statements of Financial Position
The following table sets forth selected information from our consolidated statements of
financial position as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Total non-current assets ............ 457,166 539,442 478,945 475,137
Total current assets ............... 1,269,537 1,605,280 2,280,612 2,375,528
Total assets ..................... 1,726,703 2,144,722 2,759,557 2,850,665
Total non-current liabilities ......... 108,997 40,484 24,535 26,029
Total current liabilities ............ 797,455 624,445 1,167,909 1,143,311
Total liabilities .................. 906,452 664,929 1,192,444 1,169,340
Net current assets ................ 472,082 980,835 1,112,703 1,232,217
Net assets ...................... 820,251 1,479,793 1,567,113 1,681,325
Share capital .................... 239,667 261,641 261,802 262,629
Treasury shares .................. (56,605) (41,999) (79,286) (67,044)
Reserves ....................... 636,356 1,261,218 1,384,597 1,485,740
Non-controlling interests ........... 833 (1,067) — —
Total Equity .................... 820,251 1,479,793 1,567,113 1,681,325
SUMMARY
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Our net current assets increased by 107.8% from RMB472.1 million as of December 31, 2022
to RMB980.8 million as of December 31, 2023, primarily due to (i) an increase in trade and bills
receivables of RMB239.1 million; (ii) a decrease in interest-bearing bank borrowings of
RMB305.7 million, partially offset by an increase in trade and bills payables of RMB154.5
million.
Our net current assets increased by 13.4% from RMB980.8 million as of December 31, 2023
to RMB1,112.7 million as of December 31, 2024, primarily due to (i) an increase in trade and bills
receivables of RMB356.6 million; (ii) an increase in cash and cash equivalents of RMB203.0
million, partially offset by an increase in interest-bearing bank borrowings of RMB347.6 million.
Our net current assets increased from RMB1,112.7 million as of December 31, 2024 to
RMB1,232.2 million as of September 30, 2025, primarily due to (i) an increase in inventories of
RMB161.6 million; (ii) an increase in prepayments, other receivables and other assets of
RMB199.9 million, partially offset by an increase in contract liabilities of RMB15.7 million.
Our total equity increased from RMB820.3 million as of December 31, 2022 to RMB1,479.8
million as of December 31, 2023, primarily attributable to the capital contribution by our
shareholders of RMB592.9 million in 2023 as a result of our private placement of shares. Please
see “History and Corporate Structure — Major Shareholding Changes of our Company — Private
Placing of A Shares in 2023”. Our total equity increased to RMB1,567.1 million as of December
31, 2024, primarily due to our profit for the year of RMB134.4 million. Our total equity increased
from RMB1,567.1 million as of December 31, 2024 to RMB1,681.3 million as of September 30,
2025, primarily due to our profit for the period of RMB113.2 million. Please see “Consolidated
Statements of Changes in Equity” in the Accountants’ Report in Appendix I to this prospectus.
SUMMARY
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Summary of Consolidated Statements of Cash Flows
The following table sets forth selected information from our cash flows for the years/periods
indicated:
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Net cash flows from/(used in)
operating activities ......... 31,824 (31,313) (129,890) (41,664) 44,460
Net cash flows (used in)/from
investing activities .......... (153,412) (98,393) 16,758 36,721 (29,233)
Net cash flows from/(used in)
financing activities ......... 16,809 191,327 306,473 104,238 (49,481)
Net (decrease)/increase in cash
and cash equivalents ....... (104,779) 61,621 193,341 99,295 (34,254)
Cash and cash equivalents at
beginning of the year/period .. 173,092 72,287 138,926 138,926 341,879
Effect of foreign exchange rate
changes, net ............... 3,974 5,018 9,612 7,390 8,229
Cash and cash equivalents at
end of the year/period ...... 72,287 138,926 341,879 245,611 315,854
In 2023, we had net cash flows used in operating activities of RMB31.3 million, which
primarily consisted of profit before tax of RMB63.1 million, adjusted for (i) non-cash and
non-operating items such as amortization of other intangible assets of RMB30.7 million and
depreciation of right-of-use assets of RMB16.9 million and fair value gains on equity investments
measured at FVTPL of RMB25.4 million; (ii) the effects of movement in working capital such as
an increase in trade and bills receivables of RMB259.6 million, an increase in trade and bills
payables of RMB159.5 million and an increase in inventories of RMB51.1 million; and (iii)
income tax paid of RMB10.4 million.
In 2024, we had net cash flows used in operating activities of RMB129.9 million, which
primarily consisted of profit before tax of RMB124.1 million, adjusted for (i) non-cash and
non-operating items such as amortization of other intangible assets of RMB38.3 million,
write-down of inventories to net realizable value of RMB16.3 million and depreciation of
right-of-use assets of RMB14.6 million; (ii) the effects of movement in working capital such as an
SUMMARY
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increase in trade and bills receivables of RMB358.8 million, an increase in inventories of
RMB145.8 million and an increase in trade and bills payables of RMB114.9 million; and (iii)
income tax paid of RMB22.7 million.
In the nine months ended September 30, 2025, we had net cash flows from operating
activities of RMB44.5 million, which primarily consisted of profit before tax of RMB122.1
million, adjusted for (i) non-cash and non-operating items such as amortization of other intangible
assets of RMB28.4 million, equity-settled share-based payment expense of RMB16.5 million, and
write-down of inventories to net realizable value of RMB14.0 million; (ii) the effects of movement
in working capital such as an increase in prepayments, other receivables and other assets of
RMB185.4 million and an increase in inventories of RMB175.5 million; and (iii) income tax paid
of RMB12.6 million.
Please see “Financial Information — Cash Flows Analysis” for more details.
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
Current ratio (1) .................. 1.59 2.57 1.95 2.08
Quick ratio (2).................... 0.98 1.73 1.40 1.37
Notes:
(1) Current ratio equals to total current assets divided by total current liabilities as of end of the respective year/period.
(2) Quick ratio equals to current assets less inventories divided by current liabilities as of the end of the respective
year/period.
Please see “Financial Information — Key Financial Ratios” for more details.
RISK FACTORS
We believe there are certain risks and uncertainties involved in our operations, some of which
are beyond our control. We have categorized these risks and uncertainties into: (i) risks relating to
our business and industry; (ii) risks relating to doing business in jurisdictions where we operate;
and (iii) risks relating to the Global Offering. These risks include, among others, the following: (i)
new scientific and technological outcomes or trends could make our products and solutions
SUMMARY
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uncompetitive and obsolete; (ii) if our new products and solutions fail to receive market
acceptance, or if we are unable to timely develop products and solutions that meet evolving market
demand, our business, financial condition, results of operation and competitive position would be
materially and adversely affected; (iii) if we fail to manage our growth and expansion effectively,
our business, financial condition and results of operations may be materially and adversely
affected; (iv) the industry in which we operate is highly competitive. If we fail to compete against
other market players, our business, financial condition and results of operations may be materially
and adversely affected; and (v) our products and solutions are used by end customers of multiple
industries and sectors. Factors that adversely affect these industries and sectors may adversely
impact our business, financial condition and results of operations.
LEGAL PROCEEDINGS AND COMPLIANCE
We may, from time to time, become a party to various legal, arbitral or administrative
proceedings arising in the ordinary course of our business. During the Track Record Period and up
to the Latest Practicable Date, we had not been involved in any actual or pending legal, arbitration
or administrative proceedings (including any bankruptcy or receivership proceedings) that we
believe would have a material adverse effect on our business, financial condition, results of
operations or reputation and compliance. During the Track Record Period and up to the Latest
Practicable Date, we had not been involved in any material non-compliance incidents that have led
to fines, enforcement actions or other penalties that could, individually or in the aggregate, have a
material adverse effect on our business, financial condition and results of operations. For further
details, please see “Business — Legal Proceedings and Compliance”.
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, our Company was held as to (i) 39.13% by Mr. WANG
Ping; and (ii) 10.03% by ZhaoGe Investment, which was ultimately controlled by Mr. WANG Ping
as its general partner, representing 39.13% and 10.03% of the voting power at general meetings of
our Company, respectively. Immediately following the completion of the Global Offering
(assuming that no additional Shares are issued pursuant to our Equity Incentive Plans), Mr. WANG
Ping, directly and indirectly through ZhaoGe Investment, will be entitled to exercise a total of
43.36% of the voting power at general meetings of our Company. Upon Listing, each of Mr.
WANG Ping and ZhaoGe Investment will together constitute a group of our Controlling
Shareholders under the Listing Rules.
SUMMARY
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OUR LISTING ON THE MAIN BOARD OF THE SHENZHEN STOCK EXCHANGE
Since June 2017, our A Shares have been listed on Main Board of the Shenzhen Stock
Exchange. Our Directors confirm that, and our PRC Legal Advisor is of the view that, having
made all reasonable inquiries, throughout the last two full financial years (i.e., for the two years
ended December 31, 2023 and 2024) and up to the Latest Practicable Date, there had been no
instances of material non-compliance with the applicable rules of the Shenzhen Stock Exchange
and other applicable PRC securities laws and regulations. To the best knowledge of our Directors,
there are no material matters in relation to our compliance record on the Shenzhen Stock Exchange
that should be brought to the attention of the Stock Exchange. Based on the independent due
diligence conducted by the Sole Sponsor and our PRC Legal Advisor’s view above, no material
matter has come to the Sole Sponsor’s attention that would cause it to disagree with our Directors’
confirmation with regard to the compliance records of our Company on the Shenzhen Stock
Exchange.
GLOBAL OFFERING STATISTICS
The statistics in the following table are based on the assumptions that (i) the Global Offering
is completed and 35,000,000 H Shares are newly issued in the Global Offering; (ii) the Offer Size
Adjustment Option is not exercised; and (iii) 261,756,700 A Shares are issued and outstanding
following the completion of the Global Offering:
Based on the
maximum Offer Price of
HK$28.86 per H Share
Market capitalization of our Shares upon the completion of
the Global Offering (1) .................................... HK$15,052.1 million
Market capitalization of our H Shares .......................... HK$1,010.1 million
Unaudited pro forma adjusted consolidated net tangible assets
per Share (2) ............................................ HK$9.17
Notes:
(1) The calculation of market capitalization of our Shares is based on 35,000,000 H shares and 261,756,700 A Shares
expected to be in issue immediately following the completion of the Global Offering (assuming that the Offer Size
Adjustment Option is not exercised). The market capitalization of A Shares is calculated based on the closing price
of the A Shares for the five trading days immediately preceding the Latest Practicable Date of RMB47.63 per A
share and the total share capital of 261,756,700 A Shares expected to be in issue immediately following the
completion of the Global Offering.
(2) The unaudited pro forma adjusted consolidated net tangible assets per Share as of September 30, 2025 was
calculated after making the adjustments referred to in “Appendix IIA — Unaudited Pro Forma Financial
Information” of this prospectus.
SUMMARY
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DIVIDENDS
Dividend distribution to our shareholders is recognized as a liability in the period in which
the dividends are approved by our shareholders or Directors, as appropriate. During the Track
Record Period, we paid dividends of RMB24.8 million, RMB25.9 million, RMB25.8 million and
RMB33.9 million in 2022, 2023, 2024 and the nine months ended September 30, 2025,
respectively. As of the Latest Practicable Date, no dividends had been declared or remained unpaid
by us.
We do not have a fixed dividend distribution ratio. According to the PRC Company Law ( ʕ
), the No. 3 Guideline for the Supervision of Listed Companies — Cash
Dividend Distribution of Listed Companies (2025 Revision) (ˏୋ 3໮ — ɪ̹ʮ
ߎ2025ࠈࡌ)) and the Articles of Association, we are required to pay cumulative
cash dividends of any three fiscal years that account for not less than 30% of our average net
profits for those three fiscal years which are available for distribution, calculated in accordance
with PRC GAAP, provided that, among others, the sustainable operation and long term
development of the Company will not be impacted and there is no plan for significant capital
expenditure. Future profit distributions may be carried out in the form of cash dividends or stock
dividends, or a combination of both. Any proposed distribution of dividends is subject to the
discretion of our Board and approval at our Shareholders’ meetings. Our Board may recommend a
distribution of dividends in the future after taking into account our results of operations, financial
condition, operating requirements, capital requirements, shareholders’ interests and any other
conditions that our Board may deem relevant.
FUTURE PLANS AND USE OF PROCEEDS
Future Plans
Please see “Business — Our Strategies” for a detailed description of our future plans.
Use of Proceeds
Based on the maximum Offer Price of HK$28.86 per H Share and assuming the Offer Size
Adjustment Option is not exercised, we estimate that we will receive net proceeds of
approximately HK$944.5 million (equivalent to approximately RMB838.6 million) from the Global
Offering after deducting the underwriting commission and other estimated expenses paid and
payable by us in connection with the Global Offering. In line with our strategies, we intend to
SUMMARY
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use our proceeds from the Global Offering for the purposes and in the amounts set forth below:
 approximately 55% of the net proceeds, or HK$519.6 million (equivalent to
approximately RMB461.3 million), is expected to be used for enhancing our R&D and
innovation capabilities;
 approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), is expected to be used for expanding our overseas
sales network and promoting our products in overseas markets;
 approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), is expected to be used for strategic investments
and/or acquisition to achieve our long-term growth strategies;
 approximately 15% of the net proceeds, or HK$141.7 million (equivalent to
approximately RMB125.8 million), is expected to be allocated for the repayment of
certain interest-bearing bank borrowings; and
 approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), is expected to be used for working capital and general
corporate uses.
For details, please see “Future Plans and Use of Proceeds.”
LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as underwriting
fees and commissions; and (ii) non-underwriting-related expenses, comprising professional fees
paid to our legal advisors and Reporting Accountants for their services rendered in relation to the
Listing and the Global Offering, and other fees and expenses. Assuming full payment of the
discretionary incentive fee, the estimated total listing expenses (based on the maximum Offer Price
of HK$28.86 per Share) for the Global Offering are approximately HK$65.6 million, accounting
for approximately of 6.5% of our gross proceeds. Among such estimated total listing expenses, we
expect to pay underwriting-related expenses of HK$34.8 million, professional fees for our legal
advisors and Reporting Accountants of HK$20.0 million and other fees and expenses of HK$10.8
million. An estimated amount of HK3.8 million for our listing expenses, accounting for
approximately 0.4% of our gross proceeds, was or is expected to be expensed through the
statement of profit or loss and other comprehensive income, and the remaining amount of HK$61.8
million is expected to be recognized directly as a deduction from equity upon the Listing. As of
SUMMARY
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September 30, 2025, listing expenses in an aggregate of RMB0.8 million were incurred and
charged to our consolidated statement of profit or loss, and RMB13.0 million will be deducted
from equity upon the Listing.
IMPACT OF THE COVID-19 PANDEMIC
The outbreak of the COVID-19 pandemic introduced significant global challenges, impacting
economies worldwide since 2020. These challenges included travel restrictions, quarantine
measures and shifts in working arrangements. While these restrictions temporarily disrupted
sectors of the global economy, our Directors are of the view that the COVID-19 pandemic did not
have any material adverse impact on our business operations and financial condition. See
“Business — Impact of the COVID-19 Pandemic” for details.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
Our business operations continued to expand subsequent to the Track Record Period. In
particular, we continued to experience strong growth in the overseas market, especially in terms of
smart modules and solutions, as well as 5G data transmission modules (including 5G MBB/FWA
products), all of which had already been commercialized. In addition, we continued to launch new
and innovative products and solutions catered to a diverse range of applications in the general IoT,
ICV and wireless broadband sectors.
No Material Adverse Change
Our Directors have confirmed that, up to the date of this prospectus, there has been no
material adverse change in our financial or trading position or prospects since September 30, 2025,
being the end date of our latest audited financial statements, and there has been no event since
September 30, 2025 that would materially affect the information shown in the Accountants’ Report
set out in Appendix I to this prospectus.
Recent U.S.-China Tariff Policies
Recent complexities in international relations and geopolitical tensions between the United
States and China have presented new challenges. For example, in April 2025, the U.S. government
announced substantial new tariffs affecting a wide range of products and jurisdictions and has
indicated an intention to continue developing new trade policies. In response, certain other
governments announced or implemented retaliatory tariffs and other protectionist measures. In
May 2025, China and the U.S. made an announcement on a joint statement to substantially move
down the tariff levels. On June 11, 2025, U.S. President Donald Trump announced that a trade deal
was reached between the U.S. and China. On August 11, the U.S. government and China further
SUMMARY
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agreed to extend the suspension of the 24% reciprocal tariff, originally set to expire on August 12,
for an additional 90 days until November 10, 2025. On November 1, 2025, the U.S. government
announced that it would maintain the suspension of heightened reciprocal tariffs on Chinese
imports until November 10, 2026, while the currently 10% reciprocal tariff will remain in effect
during this suspension period.
We do not expect the recent developments of U.S. tariffs on imports from China to have a
material adverse effect on our business and financial conditions, because (i) revenue from the U.S.
did not constitute a material proportion. In 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, approximately 4.6%, 3.4%, 7.6%, 5.6% and 8.5% of our total
revenue was generated from the U.S.; (ii) during the Track Record Period and up to the Latest
Practicable Date, we had not experienced any material adverse changes in the order volume, price,
payment, product exchange requests or logistic arrangements related to the sales of our modules
and solutions to the U.S. as a result of U.S. tariffs. On the contrary, our overseas revenue
increased by 69.2% from RMB569.0 million for the nine months ended September 30, 2024 to
RMB962.9 million for the nine months ended September 30, 2025, among which, revenue from the
U.S. increased from RMB122.9 million for the nine months ended September 30, 2024, to
RMB240.2 million for the nine months ended September 30, 2025; and (iii) during the Track
Record Period and up to the Latest Practicable Date, we were not responsible for the U.S. tariffs
on the modules and solutions we sold to customers, because for the orders subject to U.S. tariffs,
the agreed trade terms are mainly Ex Works, Free Carrier, Free on Board and Cost, Insurance and
Freight. In accordance with international trade rules, under these trade terms, the obligation to pay
import duties and tariffs is borne by the importer rather than the exporter.
We do not expect the recent developments of Chinese tariffs on imports from the U.S. to have
a material adverse effect on our business and financial conditions because:
(i) Although we procured and imported some of our raw materials directly from the U.S.,
the procurement amount constituted an insignificant portion of our total raw material
procurement during the Track Record Period; and
(ii) Although our largest supplier during each year/period in the Track Record Period is a
subsidiary of a semiconductor company in the U.S., it is based in Singapore and
supplied its products to us from outside the U.S., unaffected by the recent developments
of Chinese tariffs on imports from the U.S.
As of the date of this prospectus, the above-mentioned tariff policies might remain subject to
further adjustments. Please see “Risk Factors — Risks Relating to Our Business and Industry —
We may be subject to the risks associated with international trade policies, geopolitics and trade
SUMMARY
–2 3–


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protection measures, including imposition of trade restrictions and sanctions, and our reputation,
business, results of operations and financial condition could be adversely affected by these factors”
for details.
Potential Property Acquisition
We plan to acquire a property in Shanghai, China for use as an office and/or staff
accommodation. As of the Latest Practicable Date, we were in active discussions with a potential
vendor. The specific terms of such acquisition will be subject to the final terms agreed upon
following further negotiations. This potential property acquisition is expected to be funded by the
proceeds raised from our private placing of A Shares in 2023. See “History and Corporate
Structure — Major Shareholding Changes of our Company — Private Placing of A Shares in
2023.”
PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
On the basis set out in Appendix IIB to this prospectus, and in the absence of unforeseen
circumstances, we estimate that our unaudited consolidated profit attributable to owners of our
Company for the year ended December 31, 2025 is as follows:
Estimated consolidated profit attributable to owners
of our Company ...........................
Not less than RMB140 million
Our Directors have prepared the estimate of the consolidated profit attributable to owners of
our Company for the year ended December 31, 2025 (the “ Profit Estimate ”) on the basis of (i) the
audited consolidated results of our Group for the nine months ended September 30, 2025; and (ii)
the unaudited consolidated results of our Group for the remaining three months ended December
31, 2025 based on the management accounts of our Group.
The Profit Estimate has been prepared on the basis of the accounting policies consistent in all
material respects with those currently adopted by our Group, as summarized in the Accountants’
Report as set out in Appendix I to this prospectus.
SUMMARY
–2 4–


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In this prospectus, unless the context otherwise requires, the following terms shall have
the meanings set forth below. Certain other terms are explained in “Glossary of Technical
Terms.”
“2020 Equity Incentive Plans” Our equity incentive plans comprising our 2020 stock
option incentive plan and 2020 restricted share incentive
plan, each with a term of four years, which was adopted
and approved by our Shareholders on July 3, 2020
“2024 Stock Option Incentive Plan” Our share option incentive plan approved by our
Shareholders on June 17, 2024, the principal terms of
which are set out in “Statutory and General Information —
D. 2024 Equity Incentive Plans” in Appendix VI to this
prospectus
“2024 Restricted Share Incentive
Plan”
Our share option incentive plan approved by our
Shareholders on June 17, 2024, the principal terms of
which are set out in “Statutory and General Information —
D. 2024 Equity Incentive Plans” in Appendix VI to this
prospectus
“2024 Equity Incentive Plans” Our equity incentive plans comprising 2024 Stock Option
Incentive Plan and 2024 Restricted Share Incentive Plan
“A Share(s)” ordinary share(s) issued by our Company, with a nominal
value of RMB1.00 each, which are traded in Renminbi and
listed on the Shenzhen Stock Exchange
“A Shareholder(s)” holder(s) of our A Share(s)
“Accountants’ Report” the accountants’ report of our Company for the Track
Record Period, as included in Appendix I to this prospectus
“AFRC” Accounting and Financial Reporting Council of Hong Kong
“Articles of Association” or
“Articles”
the articles of association of our Company, conditionally
adopted on June 5, 2025 with effect from the Listing Date,
as amended, supplemented, or otherwise modified from
time to time, a summary of which is set out in Appendix V
to this prospectus
DEFINITIONS
–2 5–


--- page 37 ---
“Audit Committee” the audit committee of the Board
“Board” the Company’s board of Directors
“business day” any day (other than a Saturday, Sunday or public holiday in
Hong Kong) on which banks in Hong Kong are generally
open for normal banking business
“Capital Market Intermediaries” the capital market intermediaries as named in “Directors
and Parties Involved in the Global Offering” in this
prospectus
“CCASS” the Central Clearing and Settlement System established and
operated by HKSCC
“China”, “Chinese mainland” or
“PRC”
the People’s Republic of China excluding, for the purposes
of this prospectus, Hong Kong, Macao and Taiwan, China
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong)
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong)
“Company,” “our Company,” “we,”
“our” or “us”
MeiG Smart Technology Co., Ltd. (ࠢ
ʮ̡) (formerly known as Shenzhen Forge Electronics Co.
Ltd. (ʮ̡ ) and Shenzhen Forge
Precision Components Co., Ltd. (ࠢ
ʮ̡)), a company established under the laws of the PRC
with limited liability on April 5, 2007 and converted into a
joint stock company with limited liability on May 14, 2015,
whose A Shares have been listed on the Shenzhen Stock
Exchange (002881.SZ)
“Controlling Shareholder(s)” has the meaning given to it under the Listing Rules and,
unless the context otherwise requires, refers to the
person(s) named in “Relationship with Our Controlling
Shareholders” in this prospectus
DEFINITIONS
–2 6–


--- page 38 ---
“CSRC” the China Securities Regulatory Commission ( ʕ਷ᗇՎ္
ึ ), a regulatory body responsible for the
supervision and regulation of the PRC national securities
markets
“Director(s)” the director(s) of our Company
“EIT” enterprise income tax
“EIT Law” the Enterprise Income Tax Law of the PRC ( ʕശɛ͏΍
), as amended, supplemented or
otherwise modified from time to time
“Extreme Conditions” extreme conditions caused by a super typhoon as
announced by the government of Hong Kong
“FINI” “Fast Interface for New Issuance,” an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and processing
of specified information on subscription in and settlement
for all new listings
“Forge International” Forge International Co., Ltd. (ʮ̡ ), a
limited company incorporated under the laws of Hong
Kong on December 16, 2014, and our direct wholly-owned
subsidiary
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., our
industry consultant
“F&S Report” the industry report commissioned by us and independently
prepared by Frost & Sullivan, a summary of which is set
forth in “Industry Overview”
“General Rules of HKSCC” the General Rules of HKSCC as may be amended or
modified from time to time and where the context so
permits, shall include the HKSCC Operational Procedures
“Global Offering” the Hong Kong Public Offering and the International
Offering
DEFINITIONS
–2 7–


--- page 39 ---
“Group,” “our Group,” “we,” “our”
or “us”
our Company and our subsidiaries (or our Company and
any one or more of our subsidiaries, as the content may
require), or where the context so requires, in respect of the
periods before our Company became the holding company
of our present subsidiaries, such subsidiaries as if they
were subsidiaries of our Company at the relevant time
“Guide for New Listing Applicants” the Guide for New Listing Applicants issued by the Hong
Kong Stock Exchange effective from January 1, 2024 (as
amended, supplemented or otherwise modified from time to
time)
“H Share(s)” overseas listed foreign shares in the share capital of our
Company, with a nominal value of RMB1.00 each, which
are to be subscribed for and traded in Hong Kong dollars
and listed on the Stock Exchange
“H Shareholder(s)” holder(s) of our H Share(s)
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“HKSCC” Hong Kong Securities Clearing Company Limited, a wholly
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your designated
HKSCC Participant’s stock account through causing
HKSCC Nominees to apply on your behalf, including by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer
Shares on your behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly owned subsidiary of
HKSCC
DEFINITIONS
–2 8–


--- page 40 ---
“HKSCC Operational Procedures” the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time to
t i m ei nf o r c e
“HKSCC Participant(s)” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” the Hong Kong Special Administrative Region of the
People’s Republic of China
“Hong Kong dollars” or “HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong Offer Shares” the 3,500,000 H Shares being initially offered for
subscription in the Hong Kong Public Offering, subject to
reallocation and the Offer Size Adjustment Option
“Hong Kong Public Offering” the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong, as further described in
“Structure of the Global Offering — The Hong Kong
Public Offering” in this prospectus
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering listed in
“Underwriting — Hong Kong Underwriters” in this
prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated February 25, 2026
relating to the Hong Kong Public Offering and entered into
by our Company, the Sole Sponsor and the Hong Kong
Underwriters
“IFRS” International Financial Reporting Standards, as issued by
the International Accounting Standards Board
“Independent Third Party(ies)” person(s) or company(ies) who/which, to the best of our
Directors’ knowledge, information and belief, is/are not a
connected person of our Company
DEFINITIONS
–2 9–


--- page 41 ---
“International Offer Shares” the 31,500,000 H Shares being initially offered for
subscription under the International Offering, subject to
reallocation and Offer Size Adjustment Option
“International Offering” the offer of the International Offer Shares at the Offer Price
outside the United States in offshore transactions in
accordance with Regulation S or any other available
exemption from registration under the U.S. Securities Act,
as further described in “Structure of the Global Offering”
in this prospectus
“International Underwriters” the underwriters of the International Offering
“International Underwriting
Agreement”
the international underwriting agreement relating to the
International Offering, which is expected to be entered into
by our Company, the Sole Sponsor, the Overall
Coordinators and the International Underwriters on or about
March 6, 2026
“Joint Bookrunners” the joint bookrunners as named in “Directors and Parties
Involved in the Global Offering” in this prospectus
“Joint Global Coordinators” the joint global coordinators as named in “Directors and
Parties Involved in the Global Offering” in this prospectus
“Joint Lead Managers” the joint lead managers as named in “Directors and Parties
Involved in the Global Offering” in this prospectus
“Latest Practicable Date” February 20, 2026, being the latest practicable date for the
purpose of ascertaining certain information in this
prospectus prior to its publication
“Listing” the listing of the H Shares on the Main Board
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Date” the date, expected to be on or about Tuesday, March 10,
2026, on which the H Shares are to be listed on the Stock
Exchange and on which dealings in the H Shares are to be
first permitted to commence on the Stock Exchange
DEFINITIONS
–3 0–


--- page 42 ---
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited
“Main Board” the stock exchange (excluding the option market) operated
by the Stock Exchange which is independent from and
operates in parallel with GEM of the Stock Exchange
“MeiG Zhilian” Shenzhen MeiG Zhilian Information Technology Co., Ltd.
(ʮ̡ ), a limited liability
company established under the laws of the PRC on October
15, 2018, and our direct wholly-owned subsidiary
“MeiG Investment” Shenzhen MeiG Smart Investment Entrepreneur Investment
C o . ,L t d .(ʮ̡ ), a limited
liability company established under the laws of the PRC on
December 31, 2019, and our direct wholly-owned
subsidiary
“Nomination Committee” the nomination committee of the Board
“Offer Price” the final offer price per Offer Share (exclusive of brokerage
of 1%, SFC transaction levy of 0.0027%, Stock Exchange
trading fee of 0.00565% and AFRC transaction levy of
0.00015%), expressed in Hong Kong dollars, at which
Hong Kong Offer Shares are to be subscribed for pursuant
to the Hong Kong Public Offering and International Offer
Shares are to be offered pursuant to the International
Offering, to be determined as described in “Structure of the
Global Offering — Pricing and Allocation” in this
prospectus
“Offer Share(s)” the Hong Kong Offer Shares and the International Offer
Shares, together with, where relevant, any additional H
Shares which may be issued by our Company pursuant to
the exercise of the Offer Size Adjustment Option
DEFINITIONS
–3 1–


--- page 43 ---
“Offer Size Adjustment Option” the option exercisable by our Company under the Hong
Kong Underwriting Agreement, pursuant to which the
Company may issue and allot up to an aggregate of
5,250,000 additional H Shares (representing approximately
15.0% of the Offer Shares initially offered under the Global
Offering) at the Offer Price to cover excess demand,
without being subject to any reallocation mechanism
“Overall Coordinators” the overall coordinators as named in “Directors and Parties
Involved in the Global Offering” in this prospectus
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ ), the central
bank of the PRC
“PRC Company Law” the Company Law of the PRC (),
as amended, supplemented or otherwise modified from time
to time
“PRC Legal Advisor” Han Kun Law Offices, our legal advisor as to PRC laws
“PRC Securities Law” the Securities Law of the PRC (),
as amended, supplemented or otherwise modified from time
to time
“Price Determination Date” the date, expected to be on or before Friday, March 6, 2026
and in any event no later than 12:00 noon on Friday, March
6, 2026, on which the Offer Price is to be fixed for the
purposes of the Global Offering
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of the Board
“Renminbi” or “RMB” Renminbi, the lawful currency of China
“SAFE” the State Administration for Foreign Exchange of the PRC
(̮ි၍ଣ҅ )
“SAMR” the State Administration for Market Regulation of the PRC
(̹ఙ္ຖ၍ଣᐼ҅ )
DEFINITIONS
–3 2–


--- page 44 ---
“SASAC” the State-owned Assets Supervision and Administration
Commission of the State Council of the PRC ( ʕശɛ͏΍
ึ )
“SAT” the State Administration of Taxation of the PRC ( ʕശɛ͏
೼ਕᐼ҅ )
“SFC” the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong)
“Shanghai Meixiao” Shanghai Meixiao Intelligent Information Technology Co.,
Ltd. (ʮ̡ ), a limited liability
company established under the laws of the PRC on August
15, 2023, and our direct wholly-owned subsidiary
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, comprising A Shares and
H Shares
“Shareholder(s)” holder(s) of our Share(s)
“Sole Sponsor” the sole sponsor as named in “Directors and Parties
Involved in the Global Offering” in this prospectus
“Sponsor-Overall Coordinator” the sponsor-overall coordinator as named in “Directors and
Parties Involved in the Global Offering” in this prospectus
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫ )
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Strategy Committee” the strategy committee of the Board
“Takeovers Code” the Code on Takeovers and Mergers issued by the SFC
“Track Record Period” the three years ended December 31, 2024 and the nine
months ended September 30, 2025
“U.S. dollars” or “US$” United States dollars, the lawful currency of the United
States
DEFINITIONS
–3 3–


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“U.S. Securities Act” United States Securities Act of 1933 and the rules and
regulations promulgated thereunder
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“United States” or “U.S.” the United States of America, its territories, its possessions
and all areas subject to its jurisdiction
“V AT” value-added tax
“White Form eIPO ” the application for Hong Kong Offer Shares to be issued in
the applicant’s own name by submitting applications online
through the designated website of the White Form eIPO
Service Provider at www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
“Xi’an ZhaoGe” Xi’an ZhaoGe Electronics Information Technology Co.,
Ltd. (ʮ̡ ), a limited liability
company established under the laws of the PRC on October
23, 2014, and our direct wholly-owned subsidiary
“ZhaoGe Investment” Shanghai ZhaoGe Enterprise Management Center (Limited
Partnership) (Άุ၍ଣʕː (Υྫ), whose
former name is Shenzhen ZhaoGe Investment Enterprise
(Limited Partnership) (ҳ༟Άุ (Υྫ), a
limited partnership established under the laws of PRC on
June 17, 2014, and one of our Controlling Shareholders
“ZhongGe Nantong” ZhongGe Smart Technology (Nantong) Co., Ltd. (౽ঐ
Ҧஔ(ஷ)ʮ̡), a limited liability company
established under the laws of the PRC on June 18, 2024,
and our direct wholly-owned subsidiary
DEFINITIONS
–3 4–


--- page 46 ---
“ZhongGe Shanghai” ZhongGe Smart Technology (Shanghai) Co., Ltd. (౽
Ҧ(ɪऎ)ʮ̡), a limited liability company
established under the laws of the PRC on March 23, 2018,
and our direct wholly-owned subsidiary
“%” percent
In this prospectus, the terms “associate(s),” “close associate(s),” “connected person(s),”
“connected transaction(s),” “core connected person(s),” “controlling shareholder(s),”
“subsidiary(ies)” and “substantial shareholder(s)” shall have the meanings given to such terms in
the Listing Rules, unless the context otherwise requires.
For ease of reference, the names of the PRC established companies or entities, laws or
regulations have been included in this prospectus in both the Chinese and English languages and
in the event of any inconsistency, the Chinese versions shall prevail.
DEFINITIONS
–3 5–


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Unless the context otherwise requires, explanations and definitions of certain terms used
in this prospectus in connection with our Company and our business shall have the meanings
set out below. The terms and their meanings may not always correspond to standard industry
meanings or usage of these terms.
“AI” artificial intelligence
“AI agent” a software entity that perceives its environment, processes
information, and takes actions to achieve specific goals
autonomously
“AR” augmented reality; technology that overlays digital
information, such as images, sounds and other data, onto
the real-world environment in real time, enhancing the
user’s perception and interaction with the surroundings
“baseband” the signal processing unit in wireless devices that handles
encoding, decoding, modulation, and demodulation
“Bluetooth” a short-range wireless technology standard for data
exchange between fixed and mobiles devices over short
distances
“cloud-edge-device architecture” integrates cloud computing, edge computing, and
device-level intelligence to optimize the deployment and
execution of AI tasks and data processing across different
layers of the network
“CO
2e” carbon dioxide equivalent
“CPE” customer premises equipment; end-user devices like routers
or gateways that connect households or businesses to the
telecom network
“CPU” central processing unit; the general-purpose processor that
fetches, decodes and executes program instructions,
orchestrating virtually all computational tasks in a
computer system
“DB” Database
GLOSSARY OF TECHNICAL TERMS
–3 6–


--- page 48 ---
“DDR” double data rate; an industry standard for synchronous
dynamic random-access memory products introduced by the
Joint Electron Device Engineering Council Solid State
Technology Association
“digital energy” Use of digital technologies to manage and optimize energy
systems for cleaner, more efficient and sustainable
operations
“DMS” driver monitoring system; a vehicle safety system to assess
the driver’s alertness and warn the driver if needed, and
eventually apply the brakes
“edge intelligence” the deployment of AI models and processing capabilities at
the network edge, close to data sources, enabling real-time
analytics, reduced bandwidth consumption, and
decentralized decision-making
“edge servers” computing nodes located at the edge of networks, designed
to process, store, and manage data near the source,
supporting latency-sensitive applications
“embodied AI” AI systems embedded in physical agents, enabling them to
perceive, interact with, and learn from the physical
environment through real-time sensorimotor integration
“EMS” electronic manufacturing service; an accepted term for a
contract manufacturer in the electronics industry
“FWA” fixed wireless access; a broadband internet service that uses
wireless networks to get internet access to fixed locations
“Gbps” gigabit per second; a unit of data transfer rate commonly
used to measure data transfer speed
“general IoT” general internet of things; covering the IoT in various
scenarios, such as smart retail, logistics, sharing economy,
consumer and industrial IoT
“generative AI” a branch of artificial intelligence that focuses on generating
new and original content
GLOSSARY OF TECHNICAL TERMS
–3 7–


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“GHG” greenhouse gas
“GNSS” global navigation satellite system
“GPS” global positioning system
“GPU” graphics processing unit; a specialized electronic circuit
designed to manipulate and alter memory to accelerate the
creation of images in a frame buffer intended for output to
a display device
“IATF” International Automotive Task Force; a coalition of
automotive manufacturers and trade associations dedicated
to establishing global quality standards for the automotive
industry
“IATF 16949” international technical standard for automotive industry
quality management systems, which is prepared by the
IATF and the ISO
“ICV” Intelligent Connected Vehicle; vehicles equipped with
advanced sensor, communication, and processing
capabilities to enable smart and connected driving features
“intelligent integration platforms” Wireless communication modules combining connectivity
with local AI computing, edge processing, protocol control
and system management
“IoT” the Internet of Things; a network of interconnected devices
that communicate and exchange data with each other over
the internet
“ISO” the International Organization for Standardization; an
independent, non-governmental organization that develops
and publishes international standards
“ISO 14001” Environmental Management Systems — Requirements with
Guidance for Use, a standard for environmental
management systems published by the ISO
GLOSSARY OF TECHNICAL TERMS
–3 8–


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“ISO 45001” Occupational Health and Safety Management System —
Requirements with Guidance for Use, an international
standard for occupational health and safety management
systems
“ISO 9001” Quality Management Systems — Requirements, an
international standard on quality management systems
developed by the ISO
“lightweight applications” Smart modules with AI computing power below 8 TOPS for
scenarios with limited processing, low data throughput and
low energy consumption
“LMM” large multimodal model; a type of AI model capable of
processing and understanding multiple data modalities,
such as text, images, audio and video
“local light intelligence” Basic AI capabilities built directly into devices, allowing
them to make simple judgments or actions without relying
on cloud processing
“MBB” mobile broadband; refers to wireless internet access via
mobile networks, such as a portable modem, wireless
modem, smartphone or other mobile device
“Mi-Fi” mobile Wi-Fi; a wireless router that acts as a mobile Wi-Fi
hotspot device
“mmWave” millimeter wave; electromagnetic waves with frequencies
between 30 GHz and 300 GHz used for high-speed data
transmission in 5G networks and other technologies in the
context of wireless communication
“MSDS” Material Safety Data Sheet; a document that provides
detailed information on the properties of a chemical
substance, including its hazards and handling requirements,
to ensure safe use in the supply chain
“MWh” megawatt-hour; a measure of energy used to quantify how
much electricity is consumed or generated within a
one-hour period
GLOSSARY OF TECHNICAL TERMS
–3 9–


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“NFC” near-field communication; a set of communication
protocols that enables two electronic devices or one
electronic device and an NFC tag to communicate with
each other
“NPU” neural processing unit; a microprocessor that specializes in
the acceleration of machine learning algorithms, typically
by operating on predictive models such as artificial neural
networks or random forests
“NR” new radio; the radio access technology developed for 5G
mobile networks and the global standard for the air
interface in 5G networks
“OEM” original equipment manufacturer, a company that uses its
brand advantages, core technologies and sales channels to
have products produced by a manufacturer with production
capabilities and then sells them to the market
“on-device intelligence” denotes AI computing capabilities integrated directly into
end devices, allowing local execution of machine learning
inference tasks without reliance on cloud resources, thereby
reducing latency and enhancing data privacy
“PCB” printed circuit board; a medium used to connect or wire
components to one another in a circuit
“PCBA” printed circuit board assembly; a completed PCB assembly
that contains electronic components, or the process of
assembling electronic components on to a PCB
“PDA” personal digital assistant; a multi-purpose mobile device
which functions as a personal information manager
“physical carriers” tangible hardware entities or intelligent terminals in which
AI models are embedded, enabling artificial intelligence to
interact with the physical world
“POS” point of sale
GLOSSARY OF TECHNICAL TERMS
–4 0–


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“REACH Declaration” refers to a supplier’s statement of compliance with the
EU’s Registration, Evaluation, Authorization and
Restriction of Chemicals (REACH) regulation, which
addresses the production and use of chemical substances
and their impacts on human health and the environment
“RedCap” reduced capability; a new 5G device category with lower
complexity, lower cost, lower power consumption and
moderate data rates commonly used in the IoT industry
“RF” radio frequency; refers to the electronic components and
circuits used to generate, amplify, transmit, and receive
radio signals in wireless communication systems
“RoHS” Restriction of Hazardous Substances; an EU directive that
restricts the use of specific hazardous materials found in
electrical and electronic products
“ROW” rest of world
“smart city” An urban area that uses the IoT and data technologies to
improve city services and residents’ quality of life
“smart module(s)” module(s) that incorporates smart technologies
“smart retail” A retail model that uses the IoT, big data and AI to enable
precision marketing, intelligent supply chain management
and shopping experiences
“smart technology” in the context of wireless communication modules, refers to
the integration of computing capability and operating
system support into communication modules, enabling them
to function not only as connectivity components but also as
intelligent system-level platforms
“SoC” system-on-chips; an integrated circuit that integrates most
or all components of a computer or other electronic system
GLOSSARY OF TECHNICAL TERMS
–4 1–


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“Sub-6” sub-6 GHz, referring to radio frequency bands below six
gigahertz that are used for wireless communication that
provides faster speed than lower frequency bands and a
wider range of coverage than higher frequency bands
“T-Box” telematics-box; an on-board communication and control
unit in vehicles that links the vehicle to external networks
such as the cloud, mobile apps and emergency services
“TDD” time division duplex; a wireless communication technology
that allows for the transmission of both upstream and
downstream data on the same frequency channel, using
different time slots
“TOPS” tera operations per second; a metric used to measure the
computational performance of hardware
“VR” virtual reality; a technology that creates a simulated,
immersive environment, allowing users to interact with and
experience a computer-generated world as if it were real,
typically through the use of specialized headsets and
sensors
“Wi-Fi” a wireless networking technology that uses radio waves to
provide wireless internet access
“Wi-Fi 6” The latest generation of Wi-Fi standard
“Wi-Fi 7” an upcoming wireless networking standard that offers
higher speeds and better performance in dense
environments. It is still under development and not yet
widely available over previous Wi-Fi generations
“2G” second generation wireless mobile telecommunications
technology
“3G” third generation wireless mobile telecommunications
technology
GLOSSARY OF TECHNICAL TERMS
–4 2–


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“3GPP” the 3rd Generation Partnership Project; a global
collaborative standards-development project for mobile
telecommunications, formed by multiple regional and
national standards organizations (including Europe, North
America, China, Japan, India, etc.), whose protocols are
globally adopted and applicable across different countries
and regions
“4G” fourth generation wireless mobile telecommunications
technology
“5G” fifth generation wireless mobile telecommunications
technology
“5G-A” 5G-Advanced, an enhanced version of 5G that builds upon
the existing 5G with improved performance and efficiency
such as faster speed, lower latency and greater capacity
“5G NR Sub-6” a 5G technology operating in frequency bands below 6
GHz. It offers a good balance of coverage and speed, ideal
for widespread 5G deployment
“5G RedCap” a 5G communication standard designed for medium-speed
IoT application. It retains key features of 5G broadband
while reducing complexity, power consumption and cost
“6G” sixth generation wireless mobile telecommunications
technology, an upcoming generation that is expected to
offer higher performance than current 5G networks
GLOSSARY OF TECHNICAL TERMS
–4 3–


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This prospectus contains certain forward-looking statements and information relating to our
Company and its subsidiaries that are based on the beliefs of our management as well as
assumptions made by and information currently available to our management. When used in this
prospectus, the words “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “going
forward,” “intend,” “may,” “ought to,” “plan,” “project,” “seek,” “should,” “target,” “will,”
“would” and the negative of these words and other similar expressions, as they relate to us or our
management, are intended to identify forward-looking statements. Such statements reflect the
current views of our management with respect to future events, operations, liquidity and capital
resources, some of which may not materialize or may change. These statements are subject to
certain risks, uncertainties and assumptions, including the other risk factors as described in this
prospectus. You are strongly cautioned that reliance on any forward-looking statements involves
known and unknown risks and uncertainties. The risks and uncertainties facing our Company
which could affect the accuracy of forward-looking statements include, but are not limited to, the
following:
 our business prospects;
 future developments, trends and conditions in the industry and markets in which we
operate or into which we intend to expand;
 our business and operating strategies and plans to achieve these strategies;
 general economic, political and business conditions in the markets in which we operate;
 changes to the regulatory environment, operating conditions and general outlook in the
industry and geographical markets in which we operate;
 the effects of the global financial markets and economic crisis;
 our financial condition and performance;
 our ability to reduce costs;
 our dividend policy;
 the amount and nature of, and potential for, future development of our business;
 capital market developments;
 the actions and developments of our competitors; and
FORW ARD-LOOKING STATEMENTS
–4 4–


--- page 56 ---
 change or volatility in interest rates, foreign exchange rates, equity prices, volumes,
operations, margins, risk management and overall market trends.
Subject to the requirements of applicable laws, rules and regulations, we do not have any and
undertake no obligation to update or otherwise revise the forward-looking statements in this
prospectus, whether as a result of new information, future events or otherwise. As a result of these
and other risks, uncertainties and assumptions, the forward-looking events and circumstances
discussed in this prospectus might not occur in the way we expect or at all. Accordingly, you
should not place undue reliance on any forward-looking information.
In this prospectus, statements of or references to our intentions or those of our Directors are
made as of the date of this prospectus. Any such information may change in light of future
developments.
All forward-looking statements in this prospectus are qualified by reference to the cautionary
statements in this section.
FORW ARD-LOOKING STATEMENTS
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An investment in our H Shares involves significant risks. You should carefully consider all
of the information in this prospectus, including the risks and uncertainties described below,
before making an investment in our H Shares. The following is a description of what we
consider to be our material risks. Any of the following risks could have a material and adverse
effect on our business, financial condition and results of operations. In any such case, the
market price of our H Shares could decline, and you may lose all or part of your investment.
These factors are contingencies that may or may not occur and we are not in a position to
express a view on the likelihood of any such contingency occurring. The information given is as
of the Latest Practicable Date unless otherwise stated, will not be updated after the date hereof,
and is subject to the cautionary statements in “Forward-looking Statements” in this prospectus.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
New scientific and technological outcomes or trends could make our products and solutions
uncompetitive and obsolete.
Our success depends on our ability to develop and integrate our technologies to support our
products and solutions. To remain competitive, we must maintain and enhance our technologies to
meet the latest downstream market needs, technological advancement and industry standards.
However, our R&D activities may involve significant time, risks and uncertainties. For example,
our R&D team may not be able to coordinate and manage the R&D projects, the expenses
associated with these activities may affect our profit margins and operating results and these
activities may not generate sufficient revenue to offset related liabilities and expenses. Moreover,
our products and solutions are used in a variety of application sectors, primarily including general
IoT, ICV and wireless broadband. Technological advancement and new industry standards in these
downstream industries may affect the application requirements of our end customers and their
products and solutions. If we fail to develop new products and solutions or refine our technologies
to match the different or additional requirements of our end customers, the sale of our products
may decrease, and our business, financial condition and results of operation may be adversely
affected.
RISK FACTORS
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If our new products and solutions fail to receive market acceptance, or if we are unable to
timely develop products and solutions that meet evolving market demand, our business,
financial condition, results of operation and competitive position would be materially and
adversely affected.
Our success depends on our ability to meet customer expectations and increase the sale of our
products and solutions to our customers. If we cannot offer products and solutions that cater to our
customers’ evolving demand, or if our competitors are able to offer products and solutions with
more competitive quality and parameters, our ability to retain our customers may be adversely
affected. We cannot assure you that new products and solutions will receive the market acceptance
we expect, or generate profits within our expected timeframe. The success and profitability of our
new products and solutions are subject to various factors such as market demand, macroeconomic
conditions and the pace of technical advancements, which we may not estimate accurately.
In addition, we may not be able to maintain our relationships with customers due to factors
beyond our control, including, but not limited to, changes in the customers’ business models, the
availability of comparable products and solutions from competitors at lower prices and shifts in
macroeconomic conditions. Any adverse development in these respects may adversely affect our
customer base, and in turn affect our business, financial condition, results of operations and
prospects.
Further, our ability to increase the sale of our products and solutions depends on our ability
to effectively market our products and solutions, respond to customer requests properly and offer
appropriate after-sale services. In 2022, 2023, 2024 and the nine months ended September 30,
2024 and 2025, our selling and marketing expenses were RMB46.4 million, RMB63.8 million,
RMB59.2 million, RMB43.0 million and RMB46.2 million, respectively, accounting for 2.0%,
3.0%, 2.0%, 2.0% and 1.6% of our total revenue for the respective periods. If we fail to conduct or
enhance our sales and marketing activities in a cost-effective manner, we may incur considerable
selling and marketing expenses. Our brand promotion and marketing activities may not be
well-received by customers and may not generate any anticipated increase in sales. We may not
generate sufficient revenue to offset the increase in selling and marketing expenses. As a result,
our business, financial condition and results of operations may be adversely affected.
RISK FACTORS
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If we fail to manage our growth and expansion effectively, our business, financial condition
and results of operations may be materially and adversely affected.
We may not be able to continue growing at the same rate as we did during the Track Record
Period, or at all. Our results of operations depend on our ability to execute our growth plan and
manage our expansion and growth successfully. The successful growth of our business depends on
our ability to:
 launch products and solutions that meet customer expectation;
 develop and integrate our core technologies;
 secure a stable supply of key raw materials at a reasonable cost;
 manage our EMS providers who provide manufacturing services for us;
 maintain and expand our sales network;
 enhance our talent management and recruit additional key personnel;
 monitor and control expenses and investments in anticipation of expanded operations;
 improve our operational, financial and management compliance programs and reporting
systems; and
 address new market opportunities and potentially unforeseen challenges as they arise.
In addition, our future growth may be affected by factors beyond our control. Such factors
include changes in macroeconomic conditions in China and globally, changes in the competitive
landscape of the industries in which we operate, government regulations, international geopolitical
situation, and changes in supply and demand for our products and solutions, among others.
The industry in which we operate is highly competitive. If we fail to compete against other
market players, our business, financial condition and results of operations may be materially
and adversely affected.
The wireless communication module industry in which we operate is highly competitive.
According to Frost & Sullivan, although leading enterprises dominate in terms of scale and
revenue, the diversity of enterprises at various levels ensures continuous technological progress
and a vibrant competitive environment. In 2024, the competitive landscape in the global wireless
RISK FACTORS
–4 8–


--- page 60 ---
communication module market was relatively concentrated, with the five largest manufacturers
accounting for 76.8% of the market share in total. We primarily compete with other companies that
focus on developing and commercializing similar products and solutions. If we compete with
players that offer competitive products and solutions at lower prices, or if we do not have (or in
the future fail to gain) more financial resources and sophisticated technological capabilities as well
as a broader customer base and stronger customer relationships than our competitors, we may not
be able to respond as quickly and effectively to new opportunities, technologies, industry
standards, customer demand or regulatory requirements as our competitors.
We may also face competition from new entrants who may offer competitive products and
solutions at lower prices. Such new entrants may increase industry competition and adversely
impact the sales, price and profit margins of our products and solutions and our market share.
Further, we may be required to make substantial additional investments in research, development,
marketing and sales, recruiting and retaining talents, and acquiring technologies complementary to,
or necessary for, our current and future products and solutions in order to respond to such potential
competition, and we cannot assure you that such measures will be effective.
If we are unable to compete successfully, or if competing successfully requires us to take
costly actions in response to the actions of our competitors, our business, financial condition and
results of operations may be materially and adversely affected.
Our products and solutions are used by end customers of multiple industries and sectors.
Factors that adversely affect these industries and sectors may adversely impact our business,
financial condition and results of operations.
Our products and solutions are primarily offered to downstream end customers of multiple
industries, primarily including general IoT, ICV , and wireless broadband. Factors that adversely
affect these industries could also materially and adversely affect our business, financial condition,
results of operations and prospects. These factors include, among others:
 a decline in demand for, or negative perception of, or negative publicity about, our
products and solutions in these industries;
 the reduction or elimination of preferential tax treatments, economic incentives and
other favorable government policies on our downstream end customers;
 regulatory restrictions, trade disputes, industry-specific quotas, tariffs, non-tariff barriers
and taxes that may have the effect of limiting exports of these industries from China;
RISK FACTORS
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 a downturn in the general economic conditions of major countries and regions that
import our products and solutions; and
 macroeconomic conditions which affects the consumption habits of end consumers.
Any decrease in the demand for our products and solutions in the downstream industries
would result in a decrease in customer orders for our products and solutions. Even if the
downstream demand increases, we may not be able to identify and capitalize on the market
opportunities. If we fail to anticipate or adjust to any shifts in industry standards or technological
advancement in these downstream industries, our products and solutions may not be able to
compete effectively. Additionally, shifts in industry standards or technological advancement in
these downstream industries may also reduce the application of our products and solutions, or even
render them obsolete. As a result, if we fail to adjust to changes in the market conditions of our
downstream industries, our business, financial condition, results of operations and prospects will
be adversely affected.
We have been and intend to continue investing significantly in R&D activities, which may
adversely affect our profitability and operating cash flow and may not generate the results we
expect to achieve.
We invest in R&D activities to develop and introduce new and enhanced products and
solutions. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our R&D
expenses were RMB185.9 million, RMB213.9 million, RMB208.1 million, RMB148.3 million and
RMB153.1 million, respectively, accounting for 8.1%, 10.0%, 7.1%, 6.8% and 5.4% of our total
revenue for the respective periods. The industry in which we operate is subject to rapid
technological innovations. To expand our product portfolio and to remain competitive in the
industry, we need to continue investing significant resources in R&D activities. As a result, we
may continue to incur significant R&D expenses in the future.
However, we cannot guarantee that our efforts will be successful or deliver the effects,
functions or benefits we expect. R&D activities are inherently uncertain. We may not be able to
obtain sufficient resources, including qualified R&D personnel and R&D equipment to support the
R&D of new or enhanced products and solutions. Even if we succeed in our R&D efforts and
generate the results we expect, we may still encounter practical difficulties in commercializing our
R&D outcomes. R&D activities are time-consuming and by the time our products and solutions are
due for commercialization, new technologies could render our products and solutions obsolete, in
which case we may not be able to recover related R&D expenses, which could result in a decline
in our revenue, profitability and market share.
RISK FACTORS
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Even if our R&D efforts successfully result in the development and commercialization of new
products and solutions, these efforts may not contribute to our future results of operations within
our expected timeframe, or at all. The success and profitability of our new products and solutions
are subject to various factors such as market demand, macroeconomic conditions and the pace of
technological advancement, which are beyond our control. Therefore, the contributions from our
R&D efforts may not meet our expectations or even cover the costs of such efforts, which would
materially and adversely affect our business, financial condition, results of operations and
competitive position.
We may not be able to implement our growth plan, and our business, financial condition and
results of operations may be adversely affected.
We plan to continue investing in R&D to drive product iteration and industry expansion,
build and strengthen global sales and supply chain networks to accelerate international expansion
and expand along the industry value chain, and pursue strategic mergers and acquisitions to create
new growth opportunities. For details, please see “Business — Our Strategies.” The success of our
business initiatives and strategies depends on various factors, such as economic condition, market
condition, competition, regulatory requirements, technological advancement and customer
preferences. These factors may be difficult to predict or control. If they do not develop as we
expect, our business initiatives and strategies may not be successful in enhancing our business as
anticipated.
In addition, the execution of these plans may require significant investment of capital and
other resources and management attention, and we may face challenges in implementing them
effectively or within the expected time frame. As a result, we may experience delays, cost
overruns or other obstacles that may limit our ability to realize the full benefits of these initiatives.
If we are unable to successfully execute our business initiatives and strategies, or if the benefits
we realize are less than we estimate, our business, financial condition and results of operations
may be adversely affected.
We may not be able to obtain or maintain adequate intellectual property rights protection for
our products and solutions, or the scope of such intellectual property rights protection may
not be sufficiently broad.
Our success depends in a large part on our ability to protect our proprietary technology as
well as our products and solutions from competition by obtaining, maintaining and enforcing our
intellectual property rights, including patent rights. We have been protecting the proprietary
technologies that we consider commercially important by, among other methods, filing patent
applications in China and other jurisdictions. As of September 30, 2025, we had 299 granted
patents in China, including nine invention-related patents. As of the same date, we had 100
RISK FACTORS
–5 1–


--- page 63 ---
copyrights and 10 registered trademarks in China. The intellectual property application process
may be expensive and time-consuming, and we may not be able to file and prosecute all necessary
or desirable intellectual property applications at a reasonable cost or in a timely manner, if at all.
In addition, we may fail to identify patentable aspects of our R&D outputs before it is too late to
obtain patent protection. As a result, we may not be able to prevent competitors from developing
and commercializing competitive products and solutions in any or all such fields.
Even if we have identified, filed and prosecuted our intellectual property applications,
approvals may not be granted or our intellectual property may be invalidated for multiple reasons,
including known or unknown prior deficiencies in the intellectual property application or the lack
of novelty in the underlying technology. As such, we cannot assure you that we will be able to
discern the scope of the intellectual property protection or obtain adequate intellectual property
protection with respect to our products and solutions.
Even if our intellectual property applications are approved, they may not be approved in a
form that will provide us with any meaningful protection from competition or with any
competitive advantage. For instance, our competitors may be able to circumvent our patents by
developing similar or alternative technologies, products or solutions in a non-infringing manner.
The issuance of a patent is not conclusive as to its inventor, scope, validity or enforceability, and
our patents may be challenged in the courts or patent offices in China and other jurisdictions.
Further, the life of a patent and the protection it affords is limited. For example, in China,
invention patents and utility model patents are valid for 20 years and 10 years from the date of
application, respectively. If we fail to extend the life of our patents, we may face competition for
any approved products and solutions, even if we successfully obtain patent protection, once the
patent life has expired for the product.
We depend on the continued services and contributions of our senior management and other
key employees, including senior R&D personnel and skilled engineers.
Our continued success depends and will continue to depend to a significant extent on our
efforts and abilities to retain the key members of our management team, and to make sure each of
them is and will continue to be actively engaged in our management and our strategic planning.
Our future performance will also depend on their continuing services and contributions to
formulating and executing our business plan and to identifying and pursuing new opportunities.
The loss of the services of any of these individuals, or the ineffective management of any
leadership transitions, could significantly delay or prevent the achievement of our development
and strategic objectives, which could adversely affect our business, financial condition, results of
operations and prospects.
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In addition, our success depends on our ability to attract and retain a large number of other
qualified employees, especially senior R&D personnel and skilled engineers. In particular, we rely
on our R&D team to develop our core technologies and new products and solutions. In order to
compete for talent, we may need to offer higher compensation, better training, more attractive
career opportunities and other benefits to our employees, which may be costly. We cannot assure
you that we will be able to attract, assimilate, develop or retain the qualified personnel necessary
to support our future growth. Even if we attract and retain qualified personnel, our ability to train
and integrate new employees into our operations may not meet the demands of our growing
business. Furthermore, any disputes between us and our employees or any labor-related regulatory
or legal proceedings may divert management and financial resources, negatively affect staff
morale, reduce our productivity, or harm our reputation and future recruiting efforts. Any of the
above issues related to our workforce may materially and adversely affect our business, financial
condition, results of operations and future growth.
We may be subject to the risks associated with international trade policies, geopolitics and
trade protection measures, including imposition of trade restrictions and sanctions, and our
reputation, business, results of operations and financial condition could be adversely affected
by these factors.
Our operations are subject to deterioration in political and economic relations between
countries, sanctions and export controls administered by government authorities in the countries in
which we operate, and other geopolitical challenges, including, but not limited to, economic and
labor conditions, increased custom duties, tariffs, taxes and other costs, and political instability.
In particular, the U.S. government has imposed economic and trade sanctions directly or
indirectly affecting China-based technology companies. It is possible that the extent and scope of
such sanctions may escalate. There is no assurance as to how the U.S.-China trade tensions might
develop or whether there will be any changes to the scope and extent of goods that are or will be
subject to such export controls, sanctions, tariffs, or new trade policies introduced by the two
countries. We cannot predict the implications of the ongoing U.S.-China trade tensions and the
resulting impact on our industry and the global economy.
Recent trade tensions, such as the ongoing U.S.-China trade dispute, have led to tariffs,
export controls and other restrictive measures targeting high-technology goods, semiconductors
and electronics. On February 1, 2025, the U.S. government announced a 10% tariff on all imports
from China (including Hong Kong SAR), citing issues related to fentanyl and other illegal
substances, effective February 4, 2025. China responded by imposing a 15% tariff on certain
imports originating from the United States, among other measures. On March 3, 2025, the U.S.
further imposed a 10% tariff on all imports from China (including the Hong Kong SAR), thereby
increasing the U.S. tariff rate on all imports from China (including the Hong Kong SAR) to 20%,
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effective March 4, 2025. On April 2, 2025, the U.S. government issued an Executive Order, which
imposed a 10% baseline tariff on all imports from all U.S. trade partners, effective on April 5,
2025, and individualized higher reciprocal tariffs to certain countries — including 34% on Chinese
goods (including the Hong Kong SAR), effective on April 9, 2025, to counter persistent U.S. trade
deficits.
On April 8, 2025, such reciprocal tariffs on Chinese goods were increased from 34% to 84%.
On April 9, 2025, the U.S. government introduced a 90-day pause on tariff increases for over 75
countries, excluding China. The U.S. government further amended the reciprocal tariffs to China
(including the Hong Kong SAR) again to 125%.
On May 12, 2025, the United States and the People’s Republic of China issued a joint
statement following their economic and trade discussions in Geneva. Both the United States and
China agreed to a temporary 90-day reduction in tariffs, effective May 14, 2025. During this
period, the U.S. would lower its “reciprocal tariffs” on Chinese goods (including the Hong Kong
SAR) from 125% to 10% by suspending the 24 percentage points of that rate for an initial period
of 90 days. In response, China would reciprocate by reducing tariffs from 125% to 10%. On
August 11, 2025, President Trump signed an Executive Order to further extend the suspension of
the additional 24% reciprocal tariffs on Chinese goods, originally set to expire on August 12, for
an additional 90 days until November 10, 2025. On November 1, 2025, the U.S. government
announced that it would maintain the suspension of heightened reciprocal tariffs on Chinese
imports until November 10, 2026, while the currently 10% reciprocal tariff would remain in effect
during this suspension period.
During the Track Record Period and up to the Latest Practicable Date, we were not
responsible for the U.S. tariffs on the modules and solutions we sold to customers. To the best of
our knowledge after due inquiry, during the Track Record Period and up to the Latest Practicable
Date, the U.S. tariff applicable to our products were as follows: (i) from 2022 to January 2025, our
modules and solutions were generally subject to U.S. tariff of 7.5%; (ii) from February to May
2025, the U.S. tariff applied to our modules and solutions rose to up to approximately 152.5% as a
result of the trade tension between the U.S. and China; (iii) Since June 2025 and up to the Latest
Practicable Date, the U.S. tariff applied to our modules and solutions were reduced to generally
ranging between 27.5% to 37.5%, as the trade tension eased. Please see “Business — Impacts of
Recent Regulations in Relation to Trade Restrictions” for details.
However, if the contractual terms between us and our customers relating to tariff
arrangements are amended in the future, we may be exposed to the risks arising from increases in
tariffs.
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In recent years, the United States has increased export controls restrictions on China through
the Export Administration Regulations (the “ EAR”), which includes a list of foreign persons on
which certain trade restrictions are imposed (the “ Entity List ”). The export, re-export and/or
in-country transfer of items subject to the EAR to a listed foreign person is generally prohibited
unless the specified license requirements are met. These restrictions or regulations, and similar or
more expansive restrictions or regulations that may be imposed by the U.S. or other jurisdictions
in the future, may materially and adversely affect our ability to acquire technologies, systems,
devices or components that may be critical to our technology infrastructure, product offerings and
business operations. Any uncertainties and changes in these current or future restrictions or
regulations may have a negative impact on our reputation and business. If certain of our customers
or suppliers, including our EMS providers, are listed on the Entity List and are subject to
restrictions from sourcing or selling technologies, software, or components from or to us, we may
not be able to obtain, extend or maintain the requisite regulatory permits in relation to our
transactions with these customers and suppliers.
During the Track Record Period, our products and solutions were offered to our downstream
customers in China and overseas. After consultation with our legal advisor as to U.S. sanctions,
our Directors understand that the impact of U.S. government sanctions on our business operations
is limited and manageable because (i) we were not listed as a sanctioned target; and (ii) our
business operations were not expected to trigger primary or secondary sanctions risks under
existing U.S. sanctions regimes because our customers are not subject to sanctions authorities that
would expose us to a material risk of the imposition of U.S. sanctions. In addition, we have in
place a clearly defined internal screening process for counterparties, including suppliers,
customers, and other third parties. As of the Latest Practicable Date, none of our suppliers
appeared on the Specially Designated Nationals and Blocked Persons List or any equivalent
restricted parties lists maintained by relevant sanctioning authorities. As of the Latest Practicable
Date, we did not sell products to customers located in sanctioned countries. However, we cannot
assure you that our downstream customers will not engage in the export of their goods
incorporating our products and solutions into the U.S. or other countries and regions, and that such
export will not be subject to the restrictions introduced by the U.S. or other states and political
entities. Furthermore, if we export our products and solutions to other countries and regions which
are or become subject to sanctions or export controls, our business, financial condition and results
of operations may be materially and adversely affected.
Furthermore, we have no control over the countries to which downstream customers will sell
or export their end products and solutions. If the export sales of the downstream customers’ end
products and solutions are restricted, prohibited or made subject to any trade conditions under any
international policies or international export controls or economic sanctions imposed by any
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jurisdictions, the downstream customers’ demand for our products and solutions may drop
significantly and, as a result, our business, financial condition and results of operations may be
materially and adversely affected.
We may not be able to fully maintain quality control over our products and solutions.
The quality of our products and solutions depends on the effectiveness of our quality control
and quality assurance protocols, which in turn depend on factors such as the quality of related
training programs and our ability to ensure that our employees adhere to our quality control and
quality assurance protocol. However, our quality control and quality assurance protocol may not be
effective in preventing and resolving deviations from our quality standards. Any failure to execute
our quality control and quality assurance protocols could render our products and solutions
unsuitable for use within their service life or defective, which may adversely impact our market
reputation and relationship with business partners.
In addition, the quality of products or services provided by our suppliers, including our EMS
providers, is beyond our control. We cannot assure you that the products manufactured by our
suppliers are safe and free of defects or can meet the relevant quality standards. In the event of
any quality issues, we could be subject to complaints and product liability claims and we may not
be able to seek indemnification from our suppliers. Please see “Risks Relating to Our Business and
Industry — Our products and solutions may be subject to warranty, indemnity and product liability
claims, which could result in significant costs and damage to our business, reputation and
downstream customer relationships, market acceptance of our products, financial condition, results
of operations and prospects” in this section. If we engage in legal proceedings against our
suppliers, such proceedings may be time-consuming and costly regardless of the outcome. Any
such issues may materially and adversely affect our business, financial condition and results of
operations.
We rely on a limited number of suppliers for raw materials and the manufacture of our
products.
We rely on a limited number of suppliers for raw materials and the manufacture of our
modules and solutions. In 2022, 2023, 2024 and the nine months ended September 30, 2025, the
aggregate purchases from our five largest suppliers in each year/period of the Track Record Period
were RMB1,159.9 million, RMB962.3 million, RMB1,720.7 million and RMB1,513.9 million,
respectively, accounting for 57.8%, 53.3%, 63.8% and 56.7% of our total purchases in each
year/period of the Track Record Period, respectively. Purchases from our largest supplier in each
year/period of the Track Record Period accounted for 37.6%, 26.5%, 34.1% and 34.9% of our total
purchases for the same periods, respectively. Please see “Business — Our Suppliers.” We may not
be able to maintain our business relationships with our suppliers due to factors such as geopolitical
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and trade tensions, unsatisfactory quality or significant increase in the prices of the raw materials
and services related to the manufacture of our products. If this happens, we may need to secure
alternative sources for the raw materials. Accordingly, if any of our suppliers, especially any of the
five largest suppliers, fails to provide raw materials or services in a timely and satisfactory
manner, or terminates their relationship with us during the Track Record Period, and if we are
unable to secure alternative sources on a timely basis, our business and results of operation may be
adversely affected.
In addition, certain of our suppliers may be subject to various regulations and may be
required to obtain and maintain various qualifications, government licenses and approvals in the
jurisdictions in which they operate. Their ability to provide sufficient raw materials or services
could be adversely affected by natural disasters, including earthquakes, drought and typhoons, in
locations where they operate, disruptions at manufacturing facilities, international trade policies,
geopolitics, and trade protection measures, including imposition of trade restrictions and sanctions.
Please see “Risks Relating to Our Business and Industry — We may be subject to the risks
associated with international trade policies, geopolitics, and trade protection measures, including
imposition of trade restrictions and sanctions” in this section. If any of these suppliers loses its
qualification eligibility because of its failure to comply with regulatory requirements, recover from
natural disasters and disruptions, or if any of these suppliers is subject to trade protection
measures, we may not be able to find alternative suppliers in a timely manner or at all.
We depend on a limited number of customers for a substantial portion of our revenue, and
the loss of, or a significant reduction in sales to, one or more of our major customers would
adversely affect our business, results of operations and financial condition.
Revenue generated from our largest customer in each year/period of the Track Record Period
accounted for 8.3%, 24.3%, 32.5% and 28.2% of our total revenue in 2022, 2023, 2024 and the
nine months ended September 30, 2025, respectively. Revenue generated from our five largest
customers in each year/period of the Track Record Period accounted for 30.4%, 39.5%, 47.2% and
49.5% of our total revenue in 2022, 2023, 2024 and the nine months ended September 30, 2025,
respectively. The business conditions, liquidity and solvency of these customers may have a
significant impact on our business dealings. Any disruption in our business relationships with
major customers could have a material adverse effect on our business, results of operations and
financial condition. Additionally, if our current major customers decide not to purchase our
products or solutions, purchase fewer of our products or solutions than they did in the past, or alter
their purchasing patterns or contractual terms with us, we may not be able to find new customers
with similar levels of demand at comparable terms in a timely manner or at all. As a result, our
business, financial condition and results of operations may be materially and adversely affected.
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Our reliance on one of our major customers exposes us to regulatory, compliance and
reputational risks.
In February 2026, the U.S. Department of Defense published an updated Section 1260H List
that included one of our major customers, and the notice was subsequently withdrawn, creating
uncertainty as to whether, and in what form, any such inclusion may be maintained or reissued.
While inclusion on the Section 1260H List does not itself constitute an economic sanctions
designation, it may lead to heightened compliance scrutiny and de-risking by commercial
counterparties, and may precede additional restrictive measures. As a result, that major customer or
its counterparties may delay or restrict transactions, impose additional compliance requirements, or
adjust commercial terms, and we may face incremental costs, potential collection delays, or
disruptions to order flow. Any of the foregoing could materially and adversely affect our business,
financial condition and results of operations.
We depend on EMS providers to manufacture our modules and solutions.
We cannot assure that our EMS providers will not increase their service prices, deliver
defective products, experience delays or shortages in product delivery, or cease operations due to
factors such as raw material shortages, shutdowns of manufacturing facilities or natural disasters,
including earthquakes, drought and typhoons. Given the complex and proprietary nature of our
products and solutions, any disruption at the facilities of our EMS providers could significantly
impact our operations. Transitioning to alternative EMS providers would require a substantial
amount of time and resources, which could adversely affect our inventory levels.
In addition, the stable and sufficient supply of finished products from our EMS providers
could be adversely affected by natural disasters in locations where our EMS providers operate,
disruptions at manufacturing facilities, international trade policies, and geopolitics and trade
protection measures, including imposition of trade restrictions and sanctions. Please see “Risks
Relating to Our Business and Industry — We may be subject to the risks associated with
international trade policies, geopolitics and trade protection measures, including imposition of
trade restrictions and sanctions” in this section.
Moreover, increased regulation or expectations regarding responsible business practices could
increase our compliance costs. Any failure by our EMS providers to comply with such regulations
or meet such expectations could result in negative publicity that adversely affects our reputation.
Given that we do not directly control the procurement or employment practices of our EMS
providers, we could be subject to financial or reputational risks as a result of their conduct. To the
extent we are unable to manage these risks, our ability to timely supply competitive products and
solutions may be hindered, our costs may increase, and our business, financial condition and
results of operations may be adversely affected.
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Our products and solutions may be subject to warranty, indemnity and product liability
claims, which could result in significant costs and damage to our business, reputation and
downstream customer relationships, market acceptance of our products and solutions,
financial condition, results of operations and prospects.
Our products and solutions are highly complex and may contain defects that affect their
quality or performance. Further, as our products and solutions are used in various application
scenarios, failure of the systems in which our products or solutions are integrated could cause
damage to property or people. We may be subject to product liability claims if our products and
solutions, or the integration of our products and solutions, cause system failures.
Any product liability claim, whether or not determined in our favor, could result in
significant expense, divert the efforts of our R&D and management personnel, and harm our
business. In addition, if any of our products or solutions contain defects, or have reliability, quality
or compatibility problems, we may lose existing customers and fail to attract potential customers.
Furthermore, our reputation could be adversely impacted in the event of a significant product
defect. Given the association of our individual products and solutions with our brand, any issue
with one of our products or solutions could negatively affect the demand for other products and
solutions of ours or our reputation as a whole, which could have an adverse impact on our
business, results of operations and financial condition.
In addition, certain product liability claims may be the result of defects from components
provided by our raw material suppliers or through the manufacturing process of our EMS
providers. Attempting to enforce our rights against such suppliers may be expensive,
time-consuming and ultimately futile. Such suppliers may not be able to indemnify us for the
losses resulting from such defects and product liability claims in full or at all. Further, our
insurance coverage might be insufficient to fully cover all damages sought and the claiming
process might be prolonged. As a result, any material product liability claim or litigation could
result in expenses and managerial efforts in defending them and could have a negative impact on
our reputation.
Product recall costs and significant return or exchange could adversely affect our business
and financial performance.
Generally, we do not accept sales returns except for limited reasons, such as product design
defects or quality issues. We cannot assure you that we will not encounter material product recall,
cancellation of orders or become subject to warranty claims due to product defects. If this
happens, our business, financial condition and results of operations may be adversely affected.
Furthermore, our reputation could be adversely impacted in the event of a material product recall.
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For example, if we recall one type of our products, such action could negatively affect the demand
for other products of ours or our reputation as a whole, which could have an adverse impact on our
business, financial condition and results of our operations.
Our business and prospects depend on our ability to build our brand and reputation, which
could be harmed by negative publicity regarding us, our Directors, employees, branding or
products and solutions. Any negative publicity, whether warranted or not, could adversely
affect our business.
We believe that our brand is integral to the success of our business. Since we operate in a
highly competitive market, brand maintenance directly affects our ability to maintain our market
position. Any loss of trust in our products and solutions could harm the value of our brand, which
could reduce our revenue and profitability. The successful maintenance of our brand depends on
our ability to provide high-quality and competitive products and solutions, customers’ satisfaction
with our products and solutions and after-sale services, our ability to maintain and strengthen
business relationships with our customers and the increase in brand awareness through marketing
activities. In addition, any negative publicity about us, our Directors, employees, brand or
products, whether warranted or not, may adversely affect our reputation and business. Even if it is
factually incorrect or based on isolated incidents, such negative publicity could damage our
reputation and undermine the trust and credibility we have established with our customers and
have a negative impact on our ability to attract new customers or retain our existing customers. If
our brand and reputation is damaged, we may face challenges in maintaining our current business
relationships with our customers and in entering into new markets, which may adversely affect our
business, financial condition, results of operations and prospects.
We may be exposed to risks relating to fluctuations of raw material costs.
Our raw material costs represent a substantial portion of our total cost of sales. In 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, raw material costs accounted
for 91.3%, 92.3%, 92.8%, 93.1% and 92.6% of our cost of sales, respectively. We may be subject
to fluctuations in the prices of raw materials, as well as in transportation and other necessary
supplies or services, due to factors beyond our control, such as fluctuations in foreign currency
exchange rates, changes in the geopolitical environment and economic conditions, natural disasters
or changes in the supply and demand for raw materials, transportation and other necessary supplies
or services.
Our primary raw materials include baseband chips, SoCs, memory chips, radio frequency
chips, PCBs and power management chips. The global semiconductor industry has experienced
significant volatility in recent years, including periods of supply shortages and cyclical price
fluctuations. For instance, the market for memory chips is characterized by high price volatility.
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After a period of decline in 2022 and 2023, memory chip prices began to rebound in 2024 and
continued to increase into 2025, driven by shifts in global supply and demand. For 2023, 2024 and
the nine months ended September 30, 2025, average procurement cost for memory chips increased
from US$31.0 to US$40.7 and US$49.6, respectively. Such price increases directly impact our
material costs and our mitigating measures may not fully offset the impact of rising costs. Please
see “Business — Raw Materials and Procurement — Impact of Global Chip Supply and Raw
Material Price V olatility” for details.
We cannot assure you that the price of our raw materials will not increase significantly in the
future. If that occurs, we may not be able to offset price increases by raising the prices of our
products, in which case our profit margin will decrease. On the other hand, if the prices of our
products increase significantly, we may lose our competitive advantage in the market. This in turn
could result in loss of sales and customers. In both cases, our business, financial condition and
results of operations may be materially and adversely affected.
We experienced significant growth in revenue in the ICV sector during the Track Record
Period. We may not be able to achieve the same level of growth in the ICV sector, and any
adverse developments in the ICV sector could materially and adversely affect our business,
financial condition, and results of operations.
During the Track Record Period, we experienced substantial growth in revenue generated
from the sales of our products and solutions used in the ICV sector. Revenue from this sector
increased by 73.5% from RMB342.2 million in 2022 to RMB593.6 million in 2023, and further
increased by 105.7% to RMB1,220.9 million in 2024, and increased by 25.2% from RMB788.3
million for the nine months ended September 30, 2024 to RMB986.9 million for the nine months
ended September 30, 2025. This growth was primarily attributable to the increase in sales volume
of our smart modules and solutions driven by growing demand from our downstream customers in
this sector. There is no assurance that the growth in demand for our ICV products and solutions, or
our revenue from this sector, will continue at a similar rate or at all in the future. The ICV market
is subject to rapid technological changes, evolving industry standards and intense competition.
Factors such as a slowdown in the adoption of NEVs, changes in government subsidies or
regulations, shifts in consumer preferences, or increased competition among automakers could lead
to a slowdown or decline in demand for our products.
Furthermore, the gross profit margin we derive from the ICV sector may not be possible to
sustain. The automotive industry, particularly in China, is characterized by intense pricing pressure
and competition. Our ICV customers, who often possess significant bargaining power, may demand
price reductions, especially as their own markets face margin pressure. In addition, as the market
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for ICV modules matures, we may face increased competition from other suppliers or from our
customers’ supply chain diversification initiatives, which could further impact our pricing power
and gross profit margins.
We may become involved in lawsuits to protect or enforce our intellectual property and our
patent rights could be found invalid or unenforceable if challenged in court or before any
related intellectual property agency in any jurisdiction.
Competitors may infringe our patent rights or misappropriate or otherwise violate our
intellectual property rights. To counter infringement or unauthorized use, litigation may be
necessary to enforce or defend our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of our own intellectual property rights or the proprietary rights of
others. This can be expensive and time-consuming, and may divert our management attention and
focus from business development. Any claims that we assert against perceived infringers could
also result in these parties asserting counterclaims against us alleging that we have infringed their
intellectual property rights. Many of our current and potential competitors could dedicate
substantially greater resources to enforce and/or defend their intellectual property rights than we
could. Accordingly, we may not be able to prevent third parties from infringing upon or
misappropriating our intellectual property. An adverse result in any litigation proceeding could put
our patents, as well as any patents that may be issued in the future from our pending patent
applications, at risk of being invalidated, held unenforceable or interpreted narrowly.
Furthermore, depending on the scope of discovery required in connection with intellectual
property litigation, some of our confidential information could be compromised by disclosure.
Defendant counterclaims alleging invalidity or unenforceability are common, and can be asserted
on numerous grounds. Third parties may also raise similar claims before the relevant
administrative bodies in China or other jurisdictions. Such proceedings could result in revocation
or amendment to our patents in such a way that they no longer cover and protect our products or
solutions. The outcome following legal assertions of invalidity and unenforceability is
unpredictable.
If third parties claim that we have infringed upon their intellectual property rights, we may
incur liabilities and penalties and may have to redesign or suspend the sales of products or
solutions involved.
The industry in which we operate is patent-intensive. Companies, including us, in this
industry routinely seek patent protection for their product designs. Some of our competitors have
large patent portfolios with broad rights and may claim that our expected commercial use of our
products or solution has infringed their patents. Specifically, these competitors may allege that
certain features of our products or solutions fall within the coverage of their patents. Therefore,
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our competitors may initiate legal proceedings alleging that we are infringing, misappropriating or
otherwise violating their intellectual property rights in connection with the commercialization of
our products and solutions.
We may not be able to identify or avoid intellectual property infringement activities,
primarily because determining whether a product infringes a patent involves an analysis of
complex legal and factual issues and the conclusion of such analysis is often uncertain. For
example:
 We may hire employees who have previously worked for our competitors and cannot
assure that such employees will not use their previous employers’ proprietary
know-how, technology and other proprietary information in their work for us, which
could result in litigation against us; and
 Our competitors may also have filed for patent protection which is not as yet a matter of
public knowledge, or claimed trademark rights that have not been revealed through our
searches of relevant public records.
Therefore, our efforts to identify and avoid infringement on third parties’ intellectual property
rights may not always be successful.
Any claims of patent or other intellectual property infringement, regardless of their merit,
could be expensive, time-consuming, and may divert management attention and internal resources.
These claims and the relevant proceedings could diverge management attention and result in
substantial financial costs. If our competitors or employees succeed in raising their claims, we may
be required to suspend our sales efforts of the relevant products or solutions in controversy,
redesign, reengineer or rebrand such products or solutions, pay substantial damages to third
parties, or enter into royalty or licensing agreements which may not be available on terms
favorable to us.
We may not be able to protect our trade secrets.
We rely on trade secrets, including unpatented know-how, technology and other proprietary
information, to protect our products and solutions and thus maintain our competitive position.
However, we cannot guarantee you that an employee or a third party will not intentionally or
inadvertently make an unauthorized use of or disclose our proprietary confidential information. If a
competitor gains access to and makes use of such information, our competitive position will be
compromised. In addition, to the extent that our employees or business partners use intellectual
property owned by others in their work for us, disputes may arise as to the rights in related or
resulting know-how and inventions.
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Furthermore, enforcing a claim that a third party illegally obtained and is using any of our
trade secrets is expensive and time-consuming, and the outcome is unpredictable. If we fail in
prosecuting or defending any such claims, in addition to paying monetary damages, we may lose
valuable intellectual property rights. Even if we are successful in prosecuting or defending against
such claims, litigation could result in substantial financial and human resource costs.
We are subject to credit risk due to delay in payment and defaults of customers.
We are exposed to credit risks related to delays and defaults of our trade, bills and other
receivables due from our customers or related parties in the ordinary course of our business. As of
December 31, 2022, 2023, 2024 and as of September 30, 2025, our trade and bills receivables were
RMB420.3 million, RMB659.4 million, RMB1,016.1 million and RMB761.4 million, respectively.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, our average trade and bills
receivables turnover days were 58.7 days, 91.8 days, 104.0 days and 86.3 days, respectively.
Fluctuations and extension of trade, bills and other receivables turnover may adversely affect our
cash flow and liquidity. Please see “Financial Information — Selected Balance Sheet Items —
Current Assets/Liabilities — Trade and Bills Receivables” for details. If the credit-worthiness of
our customers deteriorates or if our customers fail to settle their trade and bills receivables for any
reason, we may incur additional impairment loss. We may not be able to recover our trade
receivables in a timely manner, or at all. As a result, our business, financial condition and results
of operations may be adversely affected.
Failure to obtain or maintain any of our preferential tax treatments or government subsidies
could adversely affect our business, financial condition and results of operations.
We cannot assure you that the policies on preferential tax treatment will not change or that
any preferential tax treatment we enjoy or are entitled to enjoy will not be terminated. According
to the applicable PRC tax regulations, the statutory corporate income tax rate in the PRC is 25%.
We and certain of our subsidiaries were approved as “High New Technology Enterprises” and,
accordingly, enjoyed a preferential income tax rate of 15% during the Track Record Period. One of
our subsidiaries was qualified as Small and Low-Profit Enterprise and, accordingly, enjoyed a
preferential income tax rate of 5% during the Track Record Period. Please see Note 11 to the
Accountants’ Report in Appendix I to this prospectus. If our preferential tax treatments are
revoked, become unavailable, or if the calculation of our tax liability is successfully challenged by
PRC tax authorities, the termination of any of the various types of preferential tax treatment we
enjoy could adversely affect our business, financial condition and results of operations.
In addition, during the Track Record Period, we benefited from government subsidies. Some
of such government subsidies are non-recurring in nature. We recorded government grants under
other income and gains of RMB24.8 million, RMB17.5 million, RMB10.7 million, RMB8.8
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million and RMB16.3 million in 2022, 2023, 2024 and the nine months ended September 30, 2024
and 2025, respectively, among which the non-recurring government grants were RMB13.1 million,
RMB9.7 million, RMB2.0 million, RMB1.7 million and RMB8.6 million, respectively. Please see
Note 5 to the Accountants’ Report in Appendix I to this prospectus. Any discontinuation, reduction
or delay of any government subsidies would have an adverse impact on our business, financial
condition and results of operations.
Fair value change for equity investments at fair value through profit or loss may adversely
affect our business, financial condition and results of operations.
We made investments in certain unlisted companies during the Track Record Period and
recorded a carrying amount of equity investments at fair value through profit or loss (“ FVTPL ”)
of RMB198.9 million, RMB234.2 million, RMB190.0 million and RMB176.1 million as of
December 31, 2022, 2023, 2024 and as of September 30, 2025, respectively. We recorded gains on
equity investments at FVTPL at RMB43.9 million, RMB25.4 million, RMB1.7 million and nil, in
2022, 2023, 2024 and the nine months ended September 30, 2024, respectively. We recorded losses
on equity investments at FVTPL at RMB1.2 million in the nine months ended September 30, 2025.
Please see Note 18 and Note 5 to the Accountants’ Report in Appendix I to this prospectus for
further details.
We face exposure to fair value change for the financial assets at FVTPL. Going forward, we
may continue making such investments. We cannot assure you that factors beyond our control,
such as general economic and market conditions, changes in market interest rates, stability of the
capital markets and regulatory environment, will result in fair value gains on the equity
investments we make or that we will not incur any fair value losses on such equity investments in
the future. If we incur such fair value losses, our business, financial condition and results of
operations may be materially and adversely affected. In addition, the fair value of these equity
investments may fluctuate significantly, which contributes to the uncertainties in valuation. Any
failure to realize the benefits we expected from these equity investments may materially and
adversely affect our business, financial condition and results of operations.
We may be subject to inventory obsolescence risk.
Our inventories primarily consist of (i) raw materials; (ii) finished goods; (iii) goods in
transit; (iv) work in process; and (v) contract performance cost. As of December 31, 2022, 2023,
2024 and as of September 30, 2025, we had inventories of RMB490.4 million, RMB526.3 million,
RMB650.6 million and RMB812.2 million, respectively. Failure to adequately manage inventory
risks may lead to inventory obsolescence, decline in inventory value or inventory write-offs. In
2022, 2023, 2024 and the nine months ended September 30, 2025, our average inventory turnover
days were 85.1 days, 106.0 days, 87.4 days and 81.3 days, respectively. Any fluctuation and
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extension of inventory turnover may adversely affect our cash flow and liquidity. Please see
“Financial Information — Selected Balance Sheet Items — Current Assets/Liabilities —
Inventories” for details. For example, memory chip prices are inherently cyclical and volatile,
directly impacting our material costs. In anticipation of a new price increase cycle beginning in
early 2025, we significantly built up inventory to mitigate this effect. Please see “Business — Raw
Materials and Procurement — Impact of Global Chip Supply and Raw Material Price — Supply of
Certain Key Materials — Impact of Memory Chip Price V olatility” for details. As of September
30, 2025, the net carrying amount of our memory chip inventory was RMB217.7 million,
representing RMB196.8 million of memory chip inventory under one year, RMB20.6 million of
memory chip inventory between one to two years, and RMB0.3 million of memory chip inventory
over three years. Such build-up inventories may expose us to the risk of holding aging memory
chips. If our inventory turnover is slower than anticipated, or if technological advancements or
market demand shifts more rapidly than expected, a portion of our memory chip inventory may
become aged, obsolete or less desirable, which could lead to a material decline in their market
value and realizability. In such an event, we may be required to write down the value of our
memory chip inventory. Any of the above may adversely affect our business, financial condition
and results of operations.
In addition, we manage our inventory levels based on market forecast and maintain a safety
stock level. It may be difficult to accurately forecast demand and determine the appropriate levels
of inventory we should maintain. Any change in customer demand for our products, or the
occurrence of catastrophic events may have an adverse impact on our product sales and business
prospects. If the actual demand is lower than our forecast demand, we may be subject to overstock,
resale of the inventories at less favorable terms, or even write-downs of inventories. If we are
required to lower sale prices to increase the demand for our product sales to reduce inventory
level, our profit margins might be adversely affected. If the actual demand is higher than our
forecast demand, we may not be able to fulfill all the orders we receive to maximize our revenue.
As a result, the market share of our products may be adversely affected. Any of the above may
adversely affect our business, financial condition and results of operations.
Failure to fulfill our contractual liabilities could adversely affect our liquidity and financial
condition.
Our contract liabilities primarily arise from advance payments made by our customers to us
before we fulfill our performance obligations. Our contract liabilities were RMB67.5 million,
RMB52.3 million, RMB109.3 million and RMB125.1 million, as of December 31, 2022, 2023,
2024 and as of September 30, 2025. Please see “Financial Information — Selected Balance Sheet
Items — Current Assets/Liabilities — Contract Liabilities.” There is no assurance that we will be
able to fulfill our obligations in respect of contract liabilities as the fulfillment of our performance
obligations is subject to various factors, including the market demand, the stability of supply and
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price of raw materials, the quality and price of service provided by, and the production capacity of,
our EMS providers. If we are not able to fulfill our obligations with respect to our contract
liabilities, the amount of contract liabilities will not be recognized as revenue and we may have to
refund the advance payment made by our customers. As a result, our liquidity and financial
condition may be adversely affected.
We have granted and may continue to grant share-based awards, which may adversely affect
our business, financial condition and results of operations.
We have established share incentive plans to grant shares to certain of our employees. The
fair value of shares granted to employees under the share incentive plan is recognized as an
expense over the vesting period, being the period over which all of the vesting conditions are
satisfied. The fair value is determined at the grant date.
We believe share-based awards are important to our ability to attract, retain and motivate our
key individuals, and we may grant share-based awards in the future. As a result, our financial
performance and ownership interests of our Shareholders may be affected by the share-based
compensation, as the expenses associated with share-based compensation will decrease our net
profit and the establishment of a new share incentive plan may potentially dilute the ownership
interests of our Shareholders. On the other hand, if we reduce the amount of shares or other
share-based compensation awards, we may not be able to attract or retain key personnel by
offering them incentives linked to the value of our Shares.
If we determine our intangible assets to be impaired, our business, financial condition and
results of operations may be adversely affected.
As of December 31, 2022, 2023, 2024 and September 30, 2025, our intangible assets were
RMB75.4 million, RMB118.7 million, RMB109.1 million and RMB104.7 million, respectively,
which primarily consist of license rights and software. The useful lives of intangible assets are
assessed to be either finite or indefinite. Intangible assets with finite lives are subsequently
amortized on straight-line basis over their estimated useful lives. The amortization period and the
amortization method for intangible assets with a finite useful life are reviewed at the end of each
reporting period. Please see Note 14 to the Accountants’ Report in Appendix I to this prospectus.
If we determine our intangible assets to be impaired, our results of operations and financial
condition may be adversely affected.
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The recoverability of our deferred tax assets is subject to accounting uncertainties.
According to our accounting policies, our management is required to make judgments,
estimates and assumptions about the carrying amounts of certain assets and liabilities that are not
readily apparent from other sources. The estimates and assumptions are based on historical
experience and other relevant factors. Therefore, actual results may differ from these accounting
estimates. As of December 31, 2022, 2023, 2024 and as of September 30, 2025, we recorded
deferred tax assets of RMB41.1 million, RMB59.6 million, RMB88.4 million and RMB89.7
million, respectively.
Based on our accounting policies, deferred tax assets are recognized on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the historical
financial information. Deferred tax liabilities are generally recognized for all taxable temporary
differences. Deferred tax assets are generally recognized for all deductible temporary differences
to the extent that it is probable that taxable profits will be available against which those deductible
temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if
the temporary difference arises from the initial recognition, other than in a business combination,
of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit. In addition, deferred tax assets and liabilities are not recognized if the temporary difference
arises from the initial recognition of goodwill. The realization of deferred tax assets mainly
depends on our management’s judgment as to whether future taxable amounts will be available to
utilize those temporary differences and losses. If sufficient profits or taxable temporary differences
are not expected to be generated or are less than expected, a material reversal of deferred tax
assets may arise in future periods.
We recorded negative cash flows from operating activities during the Track Record Period,
which may have an adverse effect on our business, financial condition, results of operations
and prospects.
We recorded net cash flows used in operating activities of RMB31.3 million in 2023 and
RMB129.9 million in 2024. Please see “Financial Information — Liquidity and Capital Resources
— Cash Flow Analysis — Operating Activities”. Net operating cash outflow could impair our
ability to make necessary capital expenditures and constrain our operational flexibility as well as
adversely affect our ability to meet our liquidity requirements.
We may continue to experience net cash outflows from our operating activities in the future.
If we are unable to maintain adequate working capital, we may not be able to meet our capital
expenditure requirements or pursue our growth strategies, which may have a material adverse
effect on our business, financial condition, results of operations and prospects.
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If we fail to obtain and maintain the requisite licenses and approvals required in any
jurisdiction where we operate, our business, financial condition and results of operations may
be materially and adversely affected.
Under the laws and regulations in any jurisdiction where we operate, we are required to
obtain or complete a number of licenses, approvals, registrations, filings and other permissions for
our operation. We may become subject to additional license, approval and other requirements as
we develop and expand the scope of our business and engage in different business activities. We
may fail to meet such requirements timely or at all, in which case we may be subject to
administrative penalties and our ability to expand our business and sustain our growth may be
adversely affected.
Our insurance coverage may not be sufficient to cover all losses or potential claims by our
customers, which would affect our business, financial condition and results of operations.
We may not have adequate insurance to cover operational risks and risks relating to product
liability claims. We cannot assure you that our insurance will be adequate to cover the
abovementioned risks. If we are held liable for amounts and claims exceeding the limits of our
insurance coverage or outside the scope of our insurance coverage, our business, financial
condition and results of operations may be materially and adversely affected. Even if the amounts
and claims are within the limits and scope of our insurance coverage, the insurance provider may
not be able to make the compensation payment to us in a timely manner.
We have sales in a number of countries and regions, which are subject to legal, regulatory,
operational and other risks inherent in internal and cross-border operations.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our revenue
generated from overseas sales was RMB545.6 million, RMB665.0 million, RMB802.9 million,
RMB569.0 million and RMB962.9 million, respectively, representing 23.7%, 31.0%, 27.3%, 26.1%
and 34.1% of our total revenue, respectively.
Operating in multiple jurisdictions around the globe and expanding into new markets may
subject ourselves to the following risks:
 challenges in providing products, solutions and customer support, in recruiting personnel
in international markets and in managing sales channels effectively;
 challenges in commercializing our products and solutions in new markets where we
have limited experience with the local market dynamics and no existing or developed
sales and marketing infrastructure;
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 differences in accounting treatment in different countries and jurisdictions, uncertainties
in interpretation and application of tax laws and regulations, more onerous tax
obligations and unfavorable tax conditions and foreign exchange losses;
 exposure to litigation or third-party claims, inability to effectively enforce contractual or
legal rights and difficulty in obtaining or enforcing legal rights and judgements
overseas;
 instability or unavailability of international transportation or logistics services due to
macroeconomics, geopolitical and other factors;
 changes in or failure to comply with laws, regulations and policies as well as political,
economic and market instability, geopolitical risks or civil unrest in the relevant
countries and jurisdictions; and
 unfavorable market conditions, intense competition, unattractive products and services,
downward pressure on our selling price and any other inherent risks associated with our
international business operations.
Acquisitions, investments or strategic alliances may fail, involve significant valuation and
integration risks, and we may be unable to realize the anticipated benefits, synergies, cost
savings or efficiencies, which could materially and adversely affect our reputation, business
and results of operations.
We may make acquisitions of, or investments in, businesses or technologies that are
complementary to our business in the future, including using a portion of the proceeds from the
Global Offering for potential acquisitions. The process of identifying, evaluating and
consummating acquisitions, investments or strategic alliances, and the subsequent integration of
new assets, technologies or businesses into our existing business, requires attention from our
management and could result in a diversion of resources from our existing business, which in turn
could have an adverse effect on our operations. We may also incur significant transaction,
administrative and other costs and management time on transactions that are ultimately not
completed.
Any acquisition or investment involves inherent valuation risk. We may have to rely on
assumptions, estimates and limited information when assessing the value, prospects and risks of a
target business or technology, and our assessment may prove incorrect. As a result, we may pay a
price that exceeds the target’s actual value or the value that may ultimately be realized, or we may
otherwise fail to obtain an adequate return on the capital deployed. Overpaying for a target or any
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subsequent underperformance may result in goodwill impairment charges, amortization expenses
for intangible assets or other write-downs, and could require significant cash and/or result in
dilutive issuances of equity securities.
In addition, any acquisition, investment or strategic alliance may expose us to significant
integration risks. Integrating an acquired business, product or technology may be complex, costly
and time-consuming and may disrupt our existing operations. We may experience difficulties
integrating personnel and corporate cultures, management and reporting structures, operational
processes, information technology systems, and internal control and compliance systems, and we
may face retention or cultural challenges associated with integrating employees into our existing
business. Any integration challenges, delays or failures could reduce productivity, lead to
operational inefficiencies, increase costs, harm our reputation and adversely affect our results of
operations.
Even if we successfully consummate and integrate an acquisition, investment or strategic
alliance, the acquired assets or business may not generate the expected financial results, strengthen
our competitive position or achieve our goals and business strategy. We may be unable to realize
the anticipated benefits, including expected synergies, cost savings, efficiencies or other strategic
objectives, or such benefits may take longer than expected to achieve or be offset by integration
costs, operational disruptions, increased complexity, competitive responses, customer attrition or
changes in market conditions. If we are unable to realize anticipated benefits, synergies, cost
savings or efficiencies, our overall profitability and results of operations may be materially and
adversely affected.
Further, our due diligence may fail to identify all problems, liabilities or other shortcomings
or challenges of an acquired business, product, technology or investment, including issues related
to intellectual property, product quality or product architecture, regulatory compliance practices,
revenue recognition or other accounting practices, or issues with employees or customers. We may
also be subject to litigation or other claims in connection with an acquired company, including
claims from terminated employees, former shareholders or other third parties, which may differ
from or be more significant than the risks its business faces. If we fail to identify, consummate and
integrate acquisitions or investments on acceptable terms, accurately value targets, manage
integration effectively, or realize the anticipated benefits, our reputation, business, financial
condition and results of operations may be materially and adversely affected.
We may not be able to obtain additional capital when desired, on favorable terms or at all.
We may need to raise additional capital in the future to further expand our business and
sustain our growth. We may raise additional funds through the issuance of equity or debt related
securities, or through obtaining credit from government or financial institutions. Our ability to
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obtain additional capital is impacted by factors including, but not limited to, our market position,
future profitability, financial position and the general macroeconomic condition. We may not be
able to raise additional funds on favorable terms, or at all. If additional funds cannot be obtained
when needed and on favorable terms, our business, financial condition and results of operations
may be adversely affected. Fundraising through the issuance of debt securities or through loan
arrangements may contain terms that require significant interest payments, covenants that restrict
our business or other terms unfavorable to us. In addition, to the extent we raise funds through the
sale of additional equity securities, our shares will experience additional dilution.
Failure to detect or prevent fraudulent or illegal activities or other misconduct by our
consultants, agents, suppliers, direct customers and distributors or other third parties may
materially and adversely affect our business, financial condition and results of operations.
We may be exposed to unethical or unlawful behaviors by our consultants, agents, suppliers,
which include our raw material suppliers and EMS providers, direct customers and distributors or
any other third parties. We may have limited control over third parties involved in unlawful,
unethical or anticompetitive conducts targeted at or in connection with our operations and other
activities, such as non-compliance with laws, or third-party sabotage or allegations intended to
harm us. We may incur substantial monetary losses, suffer reputational damage, be subject to
administrative penalties and fines, have our licenses and permits revoked, or even be ordered by
regulatory authorities to suspend our operations due to misconduct. We may also be required by
regulatory authorities in the relevant jurisdictions to allocate significant resources and incur
additional costs to prevent or screen any unlawful, unethical or anticompetitive conducts by third
parties.
We are subject to risks relating to Third-Party Payment Arrangements.
During the Track Record Period, certain of our customers (individually or collectively, the
“Relevant Customer(s) ”) settled their outstanding payments with us through accounts of
third-party payors designated by them (such arrangements, the “ Third-Party Payment
Arrangements ”). Please see “Business — Our Customers — Third-Party Payment Arrangements”
for details.
We are subject to various risks relating to such Third-Party Payment Arrangements,
including: (i) possible claims for return of funds from third-party payors who were not
contractually indebted to us; (ii) potential risks arising from the fact that we have limited
knowledge about the source and purpose of the funds utilized by the third-party payors; and (iii)
possible claims from liquidators of third-party payors. In the event of any claims from third-party
payors or their liquidators, or legal proceedings instituted or brought against us in respect of any
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payments under the Third-Party Payment Arrangements, we may have to spend financial and
managerial resources to defend against such claims or legal proceedings, and our financial
condition and results of operations may be adversely affected.
We may be involved in legal proceedings and commercial or contractual disputes, which
could materially and adversely affect our reputation, business, financial condition and results
of operations.
We may be subject to claims, litigation and disputes, various legal and administrative
proceedings, and any resulting damages. In addition, agreements we entered into may include
indemnification provisions which may subject us to costs and damages in the event of a claim
against an indemnified third party. Regardless of the merit of particular claims, legal and
administrative proceedings may be costly and time consuming and may divert our management
attention.
We may be affected by legal or administrative proceedings and claims in the future. If one or
more legal or administrative matters were resolved against us or an indemnified third party, we
may incur additional expenses to cover compensatory or punitive monetary damages, disgorge any
relevant profits, establish remedial measures or comply with injunctions or specific performance.
As a result, our business, financial condition and results of operations may be materially and
adversely affected.
Failure to comply with the PRC Labor Contract Law, PRC Social Insurance Law, Regulation
on the Administration of Housing Provident Funds, or other PRC labor related regulations
and rules may subject us to fines and other legal or administrative sanctions.
Pursuant to the PRC Labor Contract Law, employers are subject to stricter requirements in
terms of signing labor contracts, minimum wages, paying remuneration, determining the term of
employees’ probation and unilaterally terminating labor contracts. In the event that we decide to
change our employment or labor practices, the Labor Contract Law and other PRC labor related
regulations and rules may limit our ability to effect those changes in a manner that we believe to
be cost-effective. In addition, due to the application and implementation of these laws and
regulations are subject to interpretation, our employment practices may not be at all times deemed
in compliance with the laws and regulations.
We are also required to participate in the employee social welfare plan administered by local
governments. Such plan consists of pension insurance, medical insurance, work-related injury
insurance, maternity insurance, unemployment insurance and housing provident fund. The amount
we are required to contribute for each of our employees under such plan should be calculated
between the minimum and maximum level as from time to time prescribed by national laws and
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regulations and local authorities. During the Track Record Period, we and certain of our PRC
subsidiaries did not make full contributions to social insurance and housing provident fund for all
employees in accordance with the Regulations on Administration of Housing Provident Fund ( И
၍ଣૢԷ) and the Social Insurance Law of the PRC (),
because certain employees were not willing to pay the social insurance and housing provident
funds in full as it requires additional contributions from these employees.
As advised by our PRC Legal Advisor, pursuant to relevant PRC laws and regulations, if we
fail to make social insurance contributions in compliance with the relevant PRC laws and
regulations in the future, we may be required to pay all outstanding social insurance contributions
within a prescribed period, with late fees at a daily rate of 0.05% of the outstanding amount,
accruing from the date when the outstanding social insurance contributions are due. If this
payment is not made within the stipulated period, the competent authority may further impose a
fine of one to three times of the overdue amount on us. In 2022, 2023 and 2024 and the nine
months ended September 30, 2025, the amount of shortfall in social insurance was RMB31.9
million, RMB31.7 million and RMB31.7 million and RMB24.8 million, respectively. In addition,
pursuant to relevant PRC laws and regulations, in case of a failure to pay housing provident fund
in full, the relevant housing provident fund management center may require us to pay the
outstanding amount within a prescribed period. If the payment is not made within such time limit,
an application may be made to the PRC courts for compulsory enforcement. In 2022, 2023 and
2024 and the nine months ended September 30, 2025, the amount of shortfall in housing provident
fund contributions was RMB7.2 million, RMB7.8 million and RMB7.6 million and RMB6.9
million, respectively. If these enforcement actions were taken by relevant authorities, our financial
condition and results of operations could be materially and adversely affected. Additionally, we
cannot assure you that any new laws and regulations or any changes in the implementation of the
existing laws and regulations will not require us to pay any contribution shortfall, overdue charges
or penalties retroactively, thereby adversely affecting our financial condition and results of
operations. For instance, on July 31, 2025, the Supreme People’s Court of the PRC issued the
Interpretation II by the Supreme People’s Court of the PRC on Legal Issues in the Trial of Labor
Dispute Cases (༆ᙑ (ɚ)) (the
“Interpretation ”), which takes effect from September 1, 2025. For details of the Interpretation and
its impact on our business operations and financial positions, please see “Regulatory Overview —
Applicable Laws and Regulations to Our Business in the PRC — Regulations on Employment and
Social Welfare — Social Insurance” and “Business — Employees”.
On September 21, 2018, the Ministry of Human Resources and Social Security of the PRC
issued the Urgent Notice on Enforcing the Requirement of the General Meeting of the State
Council and Stabilization the Levy of Social Insurance Payment (஫࿏ໝྼ਷ਕ৫੬ਕึᙄ
 ). This notice promotes the reduction of social
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insurance contributions by companies to avoid overburdening enterprises and prohibits local
authorities from requiring enterprises to make up for historically underpaid or unpaid social
insurance contributions in one go.
If the relevant authorities order us to fully contribute the social insurance and/or housing
provident funds, we would make full contributions and take rectification measures as soon as
possible within the specified period. As of the Latest Practicable Date, no penalty had been
imposed by the relevant regulatory authorities with respect to our social insurance and housing
provident fund contributions. As advised by our PRC Legal Advisor, based on the above, the
likelihood that the relevant social insurance and housing provident fund authorities would take
initiative to recover the historically unpaid social insurance and housing provident fund from us or
impose material administrative penalties on us due to our failure to provide full social insurance
and housing provident fund contributions for our employees is remote.
Failure to renew our leases or comply with PRC property-related laws and regulations
regarding certain of our properties and leased properties could adversely affect our business,
financial condition and results of operations.
We lease properties mainly for office space. As of the Latest Practicable Date, we had eight
leased properties in China. As of the Latest Practicable Date, we had not received real estate
ownership certificates or proof of authorizations from lessors of three of our leased properties
proving their right to lease those properties to us. If the lessor is not the owner of the property and
the lessor has not obtained consent from the owner or their lessor for sub-lease, or if the property
was mortgaged before it was leased to us, our lease could be invalidated or terminated as a result
of challenges by third parties. Our inability to enter into new leases or renew existing leases on
terms acceptable to us could materially and adversely affect our business, financial condition and
results of operations.
As of the Latest Practicable Date, we had not completed the lease registration for eight of our
leased properties with the relevant land and real estate administration authorities. As advised by
our PRC Legal Advisor, failure to complete the registration and filing of lease agreements will not
affect the validity of the lease agreements. However, we may be subject to fines ranging from
RMB1,000 to RMB10,000 for each lease if we fail to rectify within the prescribed period after
receiving notices from the relevant PRC government authorities. If we fail to complete the lease
registration within the period required by the relevant governmental authorities and the relevant
authorities determine that we shall be liable for failing to complete the lease registration of all the
relevant lease agreements, the aggregate amount of maximum fine will be approximately
RMB80,000.
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In addition, as of the Latest Practicable Date, we have not obtained the real estate ownership
certificate for 12 properties we owned, with a GFA of approximately 1,008.2 sq.m. As of the
Latest Practicable Date, as advised by our PRC Legal Advisor, we have not been subject to any
administrative penalty as a result of such defect. However, we cannot assure you that we will be
able to obtain the real estate ownership certificate in a timely manner or at all. In the absence of
the real estate ownership certificates for these properties, these properties are not permitted to be
used as collateral for borrowings nor can it be bought, transferred or sold.
Our business growth and results of operations may be adversely affected by changes in
natural disasters, health epidemics and pandemics, and social disruption and other outbreaks.
Our business could be adversely affected by natural disasters, such as snowstorms,
earthquakes, fires or floods, public health hazards, such as the outbreaks of widespread epidemics,
public security hazards or other events, such as wars, acts of terrorism, environmental accidents,
power shortages or communication interruptions. We cannot assure you that any backup systems
will be adequate to protect us from the effects of natural disasters, public health and public
security hazards or other events. Any of the foregoing events may give rise to interruption,
breakdowns, system failures or internet failures, which may result in the loss or corruption of data,
malfunctions of software and hardware, and adversely affect our ability to produce our products
and solutions. As a result, our business, financial condition and results of operations may be
adversely affected.
RISKS RELATING TO CONDUCTING BUSINESS IN JURISDICTIONS WHERE WE
OPERATE
Failure to fully adapt to changes in the economic, political and social conditions, as well as
government policies, laws and regulations, and industry practice guidelines in the
jurisdictions where we operate could materially and adversely affect our business, financial
condition, results of operations and prospects.
Our business, financial condition, results of operations and prospects are subject to the
economic, political and legal conditions of where we operate. Political and economic policies of
the government of where we operate could affect our business and financial condition. Failure to
fully adapt to these changes in political and economic policies may adversely affect our growth. In
recent years, the PRC government implemented a series of laws, regulations and policies which
imposed stricter standards with respect to, among other things, quality and safety control, and
supervision and inspection of companies in our industry. Please see “Regulatory Overview” for
more details. Laws, regulations and policies related to our industries will continue to evolve and
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undergo changes or adjustments, compliance to which may incur additional costs for us. If we
cannot fully comply with these Laws, regulations and policies, our business, financial condition,
results of operations and prospects may be adversely affected.
Development in the legal system of certain geographic markets in which we operate could
materially and adversely affect us. The legal systems in these geographic markets vary
significantly from one jurisdiction to another.
Legal systems of the geographic markets where we operate vary significantly from
jurisdiction to jurisdiction. Some jurisdictions have a civil law system based on written statutes
and others are based on common law. Unlike the common law system, prior court decisions under
the civil law system may be cited for reference but have limited precedential value. The legal
systems of some geographic markets where we operate are consistently evolving. Laws and
regulations that are recently enacted may not sufficiently cover all aspects of economic activities
in such markets. In particular, the interpretation and enforcement of these laws and regulations are
subject to future implementations, and the application of some of these laws and regulations to our
businesses is not settled. Since local administrative and court authorities are authorized to interpret
and implement statutory provisions and contractual terms, it may be difficult to evaluate the
outcome of administrative and court proceedings and the level of legal protection we have in many
of the geographic markets where we operate. Local courts may have discretion to reject
enforcement of foreign awards or arbitration awards. These uncertainties may affect our judgment
on the relevance of legal requirements and our ability to enforce our contractual rights or claims.
In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal
actions, claims concerning the conduct of third parties, or threats in attempt to extract payments or
benefits from us.
Furthermore, many legal systems in the geographic markets where we operate are based in
part on their respective government policies and internal interpretations, some of which are not
published on a timely basis, or at all, and may have retroactive effects. There are other
circumstances where key regulatory definitions are unclear, imprecise or missing, or where
interpretations that are adopted by regulators are inconsistent with interpretations adopted by a
court in analogous cases. As a result, we may not be aware of our violation of certain policies or
rules until sometime after the violation. In addition, administrative and court proceedings in
certain of our geographic markets may be protracted, resulting in substantial costs and diversion of
resources and management attention.
It is possible that a number of laws and regulations may be adopted or construed to be
applicable to us in our geographic markets and elsewhere that could affect our businesses and
operations. Scrutiny and regulations of the industries in which we operate may further increase,
and we may be required to devote additional legal and other resources to addressing these
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regulations. Changes in current laws or regulations or the imposition of new laws and regulations
in our geographic markets may slow the growth of our industries and affect our business, financial
condition and results of operations.
Regulations on currency exchange may limit our foreign exchange transactions, including our
ability to pay dividends and other obligations, and may affect the value of your investment.
Conversion of RMB into foreign currency and remittance of foreign currency out of the PRC
under certain circumstances are subject to Chinese foreign exchange regulations. If there are
unfavorable changes in exchange rates, or if PRC government implements regulatory policies that
limit our ability to convert RMB into foreign currency, we may not have sufficient foreign
exchange to meet our foreign exchange needs. Under current PRC foreign exchange regulations,
certain current account transactions such as profit distributions, interest payments and trade-related
expenses can be conducted in foreign currency without prior approval from the SAFE, as long as
certain procedural requirements are met. However, capital account transactions such as capital
transfers, direct investments, securities investments and repayment of borrowings are subject to
foreign exchange policies and require prior approval from the SAFE or registration with the SAFE
or authorized banks. Any insufficiency of foreign exchange may restrict our ability to obtain
sufficient foreign exchange for dividend payments to shareholders or satisfy any other foreign
exchange obligation. If we fail to obtain approvals from the SAFE to convert RMB into any
foreign exchange for any of the above purposes, our potential offshore capital expenditure plans
and even our business may be materially and adversely affected.
Fluctuations in exchange rates could result in foreign currency exchange losses.
Fluctuations in exchange rates between Renminbi, Hong Kong dollar, US dollar and other
currencies are unpredictable and may be affected by a number of factors, such as economic and
political developments. There can be no assurance that Renminbi will not appreciate or depreciate
significantly in value against the Hong Kong dollar or US dollar in the future. It is difficult to
predict how market forces may impact the exchange rates between Renminbi and foreign
currencies in the future.
Revaluation of Renminbi may have an adverse effect on your investment. For example, to the
extent that we need to convert Hong Kong dollars we receive from this Global Offering into
Renminbi for our operations, appreciation of Renminbi against Hong Kong dollar would have an
adverse effect on the Renminbi amount we would receive from the conversion. Conversely, if we
decide to convert our Renminbi into Hong Kong dollars for the purpose of making payments for
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any dividends on our Shares or for other business purposes, appreciation of the Hong Kong dollar
against Renminbi would have a negative effect on the Hong Kong dollar amount available to us.
As a result, fluctuations in exchange rates may have an adverse effect on your investment in our
Shares.
Holders of our H Shares may be subject to PRC income tax obligations.
Under the current PRC tax laws and regulations, non-PRC resident individuals and non-PRC
resident enterprises are subject to different tax obligations with respect to the dividends paid to
them by us and the gains realized upon the sale or other disposition of H Shares by them.
Non-PRC resident individuals are required to pay PRC individual income tax at a 20% rate for the
dividends or gain from share transfer derived in China under the Individual Income Tax Law of the
PRC () and its implementation regulations. Accordingly, we are
required to withhold such tax from dividend payments, unless applicable tax treaties between the
PRC and the jurisdiction in which the foreign individual or enterprise resides reduce or exempt the
relevant tax obligations. According to the Notice of the Ministry of Finance and the State
Administration of Taxation on Several Policy Issues Concerning Individual Income Tax (௅
 ) issued on May 13, 1994, foreign individuals
are exempt from individual income tax on dividends received from foreign-invested enterprises.
Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special
Administrative Region (“ HKSAR ”) for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income (ᅄ
τર) signed on August 21, 2006, the PRC government may impose tax on
dividends paid by a PRC company to a resident of the HKSAR (including natural person and legal
entity), but such tax will not exceed 10% of the total amount of the dividends payable by the
Chinese company. If an HKSAR resident directly holds 25% or more of the equity interest in a
PRC company, such tax will not exceed 5% of the total dividends payable by the Chinese
company. The Fifth Protocol to the Arrangement between the Mainland of China and the Hong
Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income ( <ࠠ
τર >) issued by the STA, effective on December 6, 2019,
stipulates that the arrangements or transactions made for the primary purpose of obtaining the
above-mentioned tax benefits are not subject to the above-mentioned provisions.
For non-PRC resident enterprises that do not have establishments or premises in the PRC,
and for those who have establishments or premises in the PRC but whose income is not related to
such establishments or premises, under the Enterprise Income Tax Law of the PRC (  ʕശɛ͏΍
), and its implementation regulations, dividends paid by us and gains realized
by such foreign enterprises upon the sale or other disposition of H Shares are typically subject to
PRC enterprise income tax at a 10% rate. The Circular on Issues Relating to the Withholding of
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Enterprise Income Tax by PRC Resident Enterprises on Dividends Paid to Overseas Non-PRC
Resident Enterprise Shareholders of H Shares (͏ΆุΣྤ̮ Hݼ؇ٰ
 ) issued by the STA, also stipulates that the
withholding tax rate for dividends payable to non-PRC resident enterprise holders of H Shares
shall be 10%, subject to a further reduction under a special arrangement or an applicable treaty
between China and the jurisdiction of the residence of the relevant non-PRC resident enterprise.
Despite the arrangements mentioned above, the interpretation and application of applicable PRC
tax laws and regulations are subject to the then relevant laws and regulations due to several
factors, including whether the relevant preferential tax treatment will be revoked in the future such
that all non-PRC resident individual holders will be subject to PRC individual income tax at a flat
rate of 20%. If there is any change to applicable tax laws and rules and interpretation or
application with respect to such laws and rules, the value of your investment in our H Shares may
be materially affected.
Any decrease or discontinuation of tax rebate for our exported products may have a negative
effect on our profitability.
According to the Notice of the Ministry of Finance and the State Administration of Taxation
on the Value-Added Tax and Consumption Tax Policy for Labor Services of Exported Goods ( ৌ
 ) issued by Ministry of
Finance and the SAT on May 25, 2012, revised on December 9, 2014 and January 20, 2020, unless
otherwise provided by law, export goods and services are subject to the exemption and refund of
value-added tax (“ VAT”) policies. Subject to the relevant PRC laws, we are entitled to a rebate of
V AT from the PRC tax authority in connection with our export sales for our products. The tax
rebate comprised a refund of V AT incurred on the raw materials we used for production of our
products in the PRC, which are subsequently exported to overseas countries. We cannot assure you
that the PRC governmental policies on tax rebate will not change or that the current policies we
enjoy will not be cancelled. If there is any reduction, suspension, discontinuation or cancellation
of tax rebate which may adversely affect the recoverability of our V AT recoverable, our business,
financial condition and profitability would be adversely affected.
Y ou may have limited resources in effecting service of legal process and enforcing judgments
against us, our Directors and senior management.
We are a company incorporated under the laws of the PRC, and a majority of our assets and
subsidiaries are located in the PRC. The majority of our Directors and senior management reside
within the PRC. The assets of these Directors and senior management also may be located within
the PRC. It may not be possible for investors to effect service of process upon us or those persons
inside the PRC, or to enforce against us or them in the PRC in any judgments obtained from
non-PRC courts.
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The PRC does not have treaties providing for the reciprocal recognition and enforcement of
judgments of courts in the United States, the United Kingdom, Japan or other countries. On
January 18, 2019, the Supreme People’s Court and the Hong Kong Special Administrative Region
Government signed the Arrangement on Reciprocal Recognition and Enforcement of Judgements in
Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special
Administrative Region (τ
ર) (the “ New Arrangement ”). The New Arrangement was issued on January 25, 2024, and came
into effect on January 29, 2024, seeking to establish a mechanism with greater clarity and certainty
for recognition and enforcement of judgments in a wider range of civil and commercial matters
between Hong Kong Special Administrative Region and Chinese mainland. Under the New
Arrangement, any party concerned may apply to the relevant PRC or Hong Kong court for
recognition and enforcement of the effective judgments in civil and commercial cases, subject to
the conditions set forth in the New Arrangement. However, we cannot assure you that all final
judgments will fully fall into the scope of New Arrangement and thus be recognized and
effectively enforced by the relevant PRC and Hong Kong court.
Any failure to comply with relevant regulations regarding the registration requirements for
employee share incentive plans may subject our share incentive plan participants or us to
fines and other legal or administrative sanctions.
Under SAFE regulations, PRC residents who participate in a share incentive plan in an
overseas, publicly listed company are required to register with SAFE or its local branch and
complete certain other procedures. Please see “Regulatory Overview — Regulations Relating to
Overseas Investment.” We and our PRC resident employees who participate in our share incentive
plans are subject to these regulations as we are publicly listed in Hong Kong. If we or any of these
PRC resident employees fail to comply with these regulations, we or such employees may be
subject to fines and other legal or administrative sanctions. We also face uncertainties that could
restrict our ability to adopt additional incentive plans for our directors, executive officers and
employees under PRC law.
RISKS RELATED TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of both Chinese
mainland and Hong Kong.
As our A Shares are listed on Shenzhen Stock Exchange and our H Shares will be listed on
Hong Kong Stock Exchange, we will be required to comply with the applicable listing rules and
other regulatory regimes of both jurisdictions unless an exemption is available or a waiver has
been obtained. Accordingly, we may incur additional costs and resources to ensure our compliance
with the listing rules of both jurisdictions.
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Following the Global Offering, our A Shares will continue to be traded on Shenzhen Stock
Exchange and our H Shares will be traded on Hong Kong Stock Exchange. Under current laws and
regulations in China, without the approval from the relevant regulatory authorities, our H Shares
and A Shares are neither interchangeable nor fungible. There is no trading or settlement between
the H Share and A Share markets. With different trading characteristics, the H Share and A Share
markets have divergent trading volumes, liquidity and investor bases, as well as different levels of
retail and institutional investor participation. As a result, the trading performance of our H Shares
and A Shares may not be comparable. Nonetheless, fluctuations in the price of our A Shares may
adversely affect the price of our H Shares, and vice versa. Due to the different characteristics of
the H Share and A Share markets, the historical prices of our A Shares may not be indicative of the
performance of our H Shares. Therefore, you should not place undue reliance on the trading
history of our A Shares when making your investment decision in our H Shares.
There has been no prior public market for our H Shares, and an active trading market for
our H Shares may not develop or be sustained.
Prior to the completion of the Global Offering, there has been no public market for our H
Shares. There can be no guarantee that an active trading market for our H Shares will develop or
be sustained after the completion of the Global Offering. The Offer Price is the result of
negotiations between our Company and the Overall Coordinators, which may not be indicative of
the price at which our H Shares will be traded following completion of the Global Offering. The
market price of our H Shares may drop below the Offer Price at any time after completion of the
Global Offering.
The price and trading volume of our H Shares may be subject to significant volatility in
response to various factors beyond our control, including the general market conditions of
securities in Hong Kong and elsewhere in the world.
The trading price of our H Shares may be volatile and could fluctuate widely in response to
factors beyond our control, including general market conditions of the securities markets in Hong
Kong, China, the United States and elsewhere in the world. In particular, the performance and
fluctuation of the market prices of other companies with business operations located mainly in
Chinese mainland that have listed their securities in Hong Kong may affect the volatility in the
price of and trading volumes for our H Shares. A number of Chinese mainland-based companies
have listed their securities, and some are in the process of preparing for listing their securities, in
Hong Kong. Some of these companies have experienced significant volatility, including significant
price declines after their initial public offerings. The trading performances of the securities of
these companies at the time of or after their offerings may affect the overall investor sentiment
towards Chinese mainland-based companies listed in Hong Kong and consequently may impact the
trading performance of our H Shares.
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Future sales or perceived sales of substantial amounts of our H Shares in the public market
could have a material adverse impact on the prevailing market price of our H Shares and our
ability to raise additional capital in the future, or may result in the dilution of your
shareholding.
The market price of our H Shares could decline as a result of future sales of a substantial
number of our H Shares or other securities relating to our H Shares in the public market, or the
issuance of new shares or other securities, or the perception that such sales or issuances may
occur. Future sales, or anticipated sales, of substantial amounts of our securities, including any
future offerings, could also adversely affect our ability to raise capital at a specific time and on
terms favorable to us. In addition, our shareholders may experience dilution in their holdings if we
issue more securities in the future. New shares or shares-linked securities issued by us may also
confer rights and privileges that take priority over those conferred by the H Shares. A certain
amount of the Shares controlled by our Controlling Shareholders are subject to certain lock-up
periods beginning on the date on which trading in our H Shares commences on the Hong Kong
Stock Exchange. While we are not currently aware of any intention of our Controlling
Shareholders to dispose of significant amounts of their Shares after the expiry of the lock-up
periods, we cannot assure you that they will not dispose of any Shares they may own now or in the
future. Market sale of Shares by the Controlling Shareholders and the availability of these Shares
for future sale may have a negative impact on the market price of our Shares.
In addition, while investors subscribing to shares in the Global Offering are not subject to
any restrictions on the disposal of the H Shares to which they subscribed, they may have existing
arrangements or agreements to dispose of part or all of the H Shares they hold immediately or
within a certain period upon completion of the Global Offering for legal and regulatory, business
and market, or other reasons. Such disposal may occur within a short period or any time or period
after the Listing Date. Any sale of the H Shares subscribed by such investors pursuant to such
arrangement or agreement could adversely affect the market price of our H Shares and any
sizeable sale could have a material and adverse effect on the market price of our H Shares and
could cause substantial volatility in the trading volume of our H Shares.
The interests of our Controlling Shareholders may not be aligned with the interests of other
Shareholders.
Immediately upon the completion of the Global Offering, our Controlling Shareholders will
control approximately 43.36% of the voting rights at our general meetings. Our Controlling
Shareholders will, through their voting power at the Shareholders’ meetings and their delegates on
the Board, have significant influence over our business and affairs, including decisions in respect
of mergers or other business combinations, acquisition or disposition of assets, issuance of
additional Shares or other equity securities, timing and amount of dividend payments, and our
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management. Our Controlling Shareholders may not act in the best interests of our minority
Shareholders. This concentration of ownership may also discourage, delay or prevent a change in
control of our Company, which could deprive our Shareholders of an opportunity to receive a
premium for the Shares as part of a sale of our Company and may significantly reduce the price of
our H Shares.
As of the Latest Practicable Date, Mr. WANG, one of our Controlling Shareholders, had
pledged 12,850,000 A Shares, representing approximately 4.91% of our total issued share capital,
in favor of certain financial institutions for commercial loans at RMB266.4 million. See
“Substantial Shareholders.” If an event of default occurs under the relevant security agreements,
the lenders may be able to enforce their rights against part or all of the pledged Shares of our
Company thereunder through legal proceedings. In such event, Mr. Wang may no longer be able to
maintain the current level of interest in our Company, which could adversely affect the influence
of our Controlling Shareholders over us.
Our historical dividends may not be indicative of our future dividend policy, and there can be
no assurance whether and when we will pay dividends in the future.
We have declared dividends in the past. We protect our Shareholders’ interest by ensuring a
consistent dividend policy. There is no assurance that we will be able to declare or distribute
dividends of any amount in any year in the future. Under the applicable PRC laws and regulations,
the payment of dividends may be subject to certain limitations, and the calculation of our profit
under the Accounting Standards for Business Enterprises may differ in certain respects from the
calculation under IFRS. The declaration, payment and amount of any future dividends are subject
to the discretion of our Directors, after taking into account various factors, including but not
limited to our results of operations, financial condition, cash flows, capital expenditure
requirements, market conditions, strategic plans and prospects for business development,
regulatory restrictions on the payment of dividends and other factors as our Directors may deem
relevant, and subject to approval at a Shareholders’ meeting. Any declaration and payment as well
as the amount of dividends will be subject to our constitutional documents and the applicable PRC
laws and regulations. Please see “Financial Information — Dividends” for further details of our
dividend policy. No dividend shall be declared or payable except out of our profits and reserves
lawfully available for distribution. Our historical dividends should not be taken as indicative of
our dividend policy in the future.
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Y ou should not place any reliance on any information released by us in connection with the
listing of our A Shares on Shenzhen Stock Exchange.
As our A Shares are listed on Shenzhen Stock Exchange, we have been subject to periodic
reporting and other information disclosure requirements in China. As a result, from time to time,
we publicly release information relating to us on Shenzhen Stock Exchange or other media outlets
designated by the CSRC. However, the information announced by us in connection with our A
Shares listing is based on regulatory requirements of the securities authorities, industry standards
and market practices in China, which are different from those applicable to the Global Offering.
The presentation of financial and operational information for the Track Record Period disclosed on
Shenzhen Stock Exchange or other media outlets may not be directly comparable to the financial
and operational information contained in this document. Therefore, prospective investors in our H
Shares should be reminded that, in making their investment decisions as to whether to purchase
our H Shares, they should rely only on the financial, operating and other information included in
this document. By applying to purchase our H Shares in the Global Offering, you will be deemed
to have agreed that you will not rely on any information other than that contained in this document
and any formal announcements made by us in Hong Kong with respect to the Global Offering.
Y ou should read the entire document carefully and only rely on the information included in
this document to make your investment decision, and we strongly caution you not to rely on
any information contained in press articles or other media coverage relating to us, our Shares
or the Global Offering.
We strongly caution our investors not to rely on any information contained in press articles or
other media regarding us, our Shares or the Global Offering. Prior to the publication of this
document, there may be press and media coverage regarding the Global Offering and us. Such
press and media coverage may include references to certain information that does not appear in
this document, including certain operating and financial information, projections, valuations and
other information. We have not authorized the disclosure of any such information in the press or
media and do not accept any responsibility for any such press or media coverage or the accuracy
or completeness of any such information or publication. We make no representation as to the
appropriateness, accuracy, completeness or reliability of any such information or publication. To
the extent that any such information is inconsistent or conflicts with the information contained in
this document, we disclaim responsibility for it and our investors should not rely on such
information.
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Certain facts, forecast and other statistics in this document obtained from official government
sources have not been independently verified and may not be reliable.
Certain facts, forecasts and other statistics in this document are derived from various
government and official resources. However, our Directors cannot guarantee the quality or
reliability of such source materials. We believe that the sources of the information are appropriate
sources for such information and have taken reasonable care in extracting and reproducing such
information. We have no reason to believe that such information is false or misleading or that any
fact has been omitted that would render such information false or misleading. Nevertheless,
information from official government sources has not been independently verified by us, the Sole
Sponsor, the Overall Coordinators, the Joint Global Coordinators, Joint Bookrunners, the Joint
Lead Managers or any of their respective affiliates or advisers and, therefore, we make no
representation as to the accuracy of such facts and statistics. Further, we cannot assure our
investors that they are stated or compiled on the same basis or with the same degree of accuracy as
similar statistics presented elsewhere. In all cases, our investors should consider carefully how
much weight or importance should be attached to or placed on such facts or statistics.
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In preparation of the Global Offering, we have sought the following waivers from strict
compliance with the relevant provisions of the Listing Rules.
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, we must have a sufficient
management presence in Hong Kong. This normally means that at least two of our executive
directors must be ordinarily resident in Hong Kong.
Since our principal business and operations are substantially located, managed and conducted
in the PRC through its PRC subsidiaries, our Directors consider that appointment of additional
executive Directors who will be ordinarily resident in Hong Kong would not be beneficial to or
appropriate for the Group. As none of our executive Directors are ordinarily based in Hong Kong,
we do not, and do not contemplate that we will in the foreseeable future, have a sufficient
management presence in Hong Kong for the purpose of satisfying the requirements under Rules
8.12 and 19A.15 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted, a waiver from strict compliance with the requirements under Rules 8.12 and 19A.15 of the
Listing Rules. We will put in place the following measures in order to ensure that regular
communication is maintained between the Stock Exchange and our Company:
(a) we have appointed two authorized representatives pursuant to Rule 3.05 of the Listing
Rules, who will act as our principal channel of communication with the Stock
Exchange. The two authorized representatives are Mr. WANG Ping, an executive
Director, and Mr. AU Kai Yin ( ᆄ઼ሬ)( “ Mr. Au ”), one of our joint company
secretaries. Mr. WANG Ping confirms that he possesses valid travel documents and can
readily travel to Hong Kong and Mr. Au is ordinarily resident in Hong Kong. Each of
the authorized representatives will be available to meet with the Stock Exchange in
Hong Kong within a reasonable period of time upon the request of the Stock Exchange
and will be readily contactable by telephone and email. Each of the authorized
representatives is authorized to communicate on behalf of our Company with the Stock
Exchange;
(b) the authorized representatives have means to contact our Directors (including our
independent non-executive Directors) promptly at all times as and when the Stock
Exchange wishes to contact our Directors for any matter;
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(c) all of our Directors have confirmed that they possess or can apply for and renew valid
travel documents to visit Hong Kong and would be able to meet with the Stock
Exchange upon reasonable notice and within a reasonable period. Each of our Directors
will be readily contactable by telephone and email, and is authorized to communicate on
behalf of our Company with the Stock Exchange;
(d) each of our Directors has provided his/her respective contact details, including office
phone numbers, mobile phone numbers, email addresses and addresses, to the Stock
Exchange and the authorized representatives. In the event that any Director expects to
travel or otherwise be out of office, he/she will provide the contact details and his/her
place of accommodation to the authorized representatives;
(e) our Company has appointed Somerley Capital Limited as our compliance advisor
pursuant to Rule 3A.19 of the Listing Rules who will have access at all times to the
authorized representatives, our Directors and other senior management of our Company,
and will act as an additional channel of communication with the Stock Exchange for the
period commencing on the date of the listing of our H Shares on the Main Board and
ending on the date when our Company distributes its annual report for the first full
financial year in accordance with Rule 13.46 of the Listing Rules; and
(f) meetings between the Stock Exchange and our Directors can be arranged through the
authorized representatives or the compliance advisor of our Company or directly with
our Directors within a reasonable time frame. The Company will inform the Stock
Exchange promptly in respect of any change in the authorized representatives and/or its
compliance advisor.
APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rule 8.17 of the Listing Rules, we must appoint a company secretary who
satisfies Rule 3.28 of the Listing Rules. According to Rule 3.28 of the Listing Rules, our company
secretary must be an individual who, by virtue of his or her academic or professional qualifications
or relevant experience, is, in the opinion of the Stock Exchange, capable of discharging the
functions of company secretary.
The Stock Exchange considers the following academic or professional qualifications to be
acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
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(b) a solicitor or barrister (as defined in the Legal Practitioners Ordinance (Chapter 159 of
the Laws of Hong Kong)); and
(c) a certified public accountant (as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong)).
In assessing “relevant experience”, the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles he or she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including the
SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to be the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
We have appointed Mr. HUANG Min ( රઽ) as one of our joint company secretaries. Mr.
Huang joined our Group in June 2014 and is our executive Director, secretary of the Board and
deputy general manager. He is primarily responsible for the Group’s securities affairs, refinancing
initiatives, and other capital market-related matters. Although our Company believes, having
regard to his past experience in handling corporate matters, that he has a thorough understanding
of our Company and the Board, he does not possess the requisite qualifications required by Rule
3.28 of the Listing Rules. Therefore, our Company has appointed Mr. Au, who is a Hong Kong
resident and possesses such qualifications, to be a joint company secretary to assist Mr. Huang in
the compliance matters for the Listing as well as other Hong Kong regulatory requirements for a
period of three years commencing from the Listing Date. For the biographies of our joint company
secretaries, please see “Directors and Senior Management — Joint Company Secretaries” in this
prospectus. Over such three-year period, we will implement measures to assist Mr. Huang to
satisfy the requisite qualifications as prescribed in Rule 3.28 of the Listing Rules.
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Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted, a waiver from strict compliance with the requirements under Rules 8.17 and 3.28 of the
Listing Rules in relation to Mr. Huang’s appointment as our joint company secretary pursuant to
Chapter 3.10 of the Guide for New Listing Applicants on the following conditions:
(a) Mr. Huang must be assisted by Mr. Au, who possesses the qualification and experience
as required under Rule 3.28 of the Listing Rules and is appointed as a joint company
secretary throughout the validity period of the waiver; and
(b) the waiver is valid for a period of three years from the Listing Date and will be revoked
immediately if and when Mr. Au ceases to provide such assistance or if there are
material breaches of the Listing Rules by our Company.
It is anticipated that Mr. Huang will gain experience with the assistance of Mr. Au. Before
the end of the initial three-year period, we will evaluate the then experience of Mr. Huang in order
to determine whether the requirements as stipulated in Rules 3.28 and 8.17 of the Listing Rules
can be satisfied at the time and on-going assistance would be needed. We would then endeavor to
demonstrate to the satisfaction of the Stock Exchange that Mr. Huang, having had the benefit of
Mr. Au’s assistance for three years, would then have acquired the “relevant experience” within the
meaning of Rule 3.28 of the Listing Rules so that a further waiver would not be necessary.
W AIVER AND EXEMPTION IN RESPECT OF THE 2024 STOCK OPTION INCENTIVE
PLAN
The Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
prescribe certain disclosure requirements in relation to the share options granted by our Company
(the “ ESOP Disclosure Requirements” ):
(i) Rule 17.02(1)(b) of the Listing Rules stipulates that all material terms of a scheme must
be clearly set out in this prospectus. Our Company is also required to disclose in this
prospectus full details of all outstanding options and their potential dilution effect on the
shareholdings upon Listing as well as the impact on the earnings per share arising from
the issue of shares in respect of such outstanding options;
(ii) Paragraph 27 of Appendix D1A to the Listing Rules requires our Company to set out in
this prospectus particulars of any capital of any member of our Group that is under
option, or agreed conditionally or unconditionally to be put under option, including the
consideration for which the option was or will be granted and the price and duration of
the option, and the name and address of the grantee; and
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(iii) Paragraph 10 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance requires our Company to disclose, amongst others,
details of the number, description and amount of any shares in or debentures of our
Company which any person has, or is entitled to be given, an option to subscribe for,
together with the particulars of the option, that is to say, (a) the period during which it
is exercisable; (b) the price to be paid for shares or debentures subscribed for under it;
(c) the consideration (if any) given or to be given for it or for the right to it; and (d) the
names and addresses of the persons to whom it or the right to it was given or, if given
to existing shareholders or debenture holders as such, the relevant shares or debentures
must be specified in the prospectus.
Pursuant to paragraphs 6 to 7 of Chapter 3.6 of the Guide for New Listing Applicants, the
Stock Exchange would normally grant waivers from disclosing the names and addresses of certain
grantees if the issuer could demonstrate that such disclosures would be irrelevant and unduly
burdensome, subject to certain conditions specified therein.
As of the Latest Practicable Date, our Company had granted outstanding options under the
2024 Stock Option Incentive Plan to 150 grantees who are employees of our Group, to subscribe
for an aggregate of 1,496,300 A Shares. The Shares underlying the granted options represent
0.50% of the total number of Shares in issue immediately after completion of the Global Offering
(assuming that (i) no new Shares are issued under our 2024 Equity Incentive Plans, (ii) the Offer
Size Adjustment Option is not exercised and (iii) no other changes are made to the issued share
capital of our Company between the Latest Practicable Date and the Listing Date). As of the Latest
Practicable Date, among the outstanding options, 387,800 were held by six connected persons,
including directors (including those who served as directors in the past 12 months), supervisors or
chief executive of our subsidiaries, and 1,108,500 were held by 144 employees of our Company,
none of whom was a Director or senior management of our Company, or other connected persons
of our Company. For details of the 2024 Stock Option Incentive Plan which involve the issuance
of new A Shares, please see section headed “Appendix VI — Statutory and General Information —
D. 2024 Equity Incentive Plans” in this prospectus.
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We have applied to: (i) the Stock Exchange for a waiver from strict compliance with the
disclosure requirements under Rule 17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the
Listing Rules; and (ii) the SFC for a certificate of exemption under section 342A of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance exempting our Company from strict
compliance with paragraph 10(d) of Part I of the Third Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance, respectively, on the ground that strict compliance with
the above requirements would be unduly burdensome for our Company and the exemption would
not prejudice the interests of the investing public for the following reasons:
(i) given that 150 grantees are involved, strict compliance with ESOP Disclosure
Requirements in setting out full details of all the grantees under the 2024 Stock Option
Incentive Plan in this prospectus would be costly and unduly burdensome for us in light
of a significant increase in costs and timing for information compilation and prospectus
preparation;
(ii) the 144 grantees who are not Directors, members of the senior management or other
connected persons of our Company have been granted options to acquire an aggregate of
1,108,500 A Shares, representing 0.37% of the total number of Shares in issue
immediately after completion of the Global Offering (assuming (i) that no new Shares
are issued under our 2024 Equity Incentive Plans, (ii) the Offer Size Adjustment Option
is not exercised and (iii) no other changes are made to the issued share capital of our
Company between the Latest Practicable Date and the Listing Date), which is not
material in the circumstances of our Company. Strict compliance with the above
requirements to disclose names, addresses, and entitlements on an individual basis will
require substantial additional disclosure without reflecting the materiality of the
information and does not provide any material nor meaningful information to the
investing public;
(iii) the grant and exercise in full of the options under the 2024 Stock Option Incentive Plan
will not cause any material adverse impact to the financial position of our Group;
(iv) lack of full compliance with the above disclosure requirements would not prevent us
from providing our potential investors with an informed assessment of the activities,
assets, liabilities, financial position, management and prospects of our Company; and
(v) material information relating to the Shares under the 2024 Stock Option Incentive Plan
has been disclosed in this prospectus, including the total number of A Shares subject to
the 2024 Stock Option Incentive Plan, the exercise price per A Share, the potential
dilution effect on shareholding, and impact on earnings per A Share upon full exercise
of the options granted under the 2024 Stock Option Incentive Plan. Our Directors
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consider that the information that is reasonably necessary for the potential investors to
make an informed assessment of our Company in their investment decision making
process has been included in this prospectus.
We have applied for, and the Stock Exchange has granted, a waiver from strict compliance
with the applicable ESOP Disclosure Requirements on the conditions that:
(i) on an individual basis, full details of the options granted by our Company under the
2024 Stock Option Incentive Plan to (1) each of our Directors, members of senior
management of the Company, and other connected persons of our Company and its
subsidiaries and (2) other grantees who had been granted options to subscribe for an
aggregate number of 20,000 or more A Shares, will be disclosed in the section headed
“Appendix VI — Statutory and General Information — D. 2024 Equity Incentive Plans”
as required under Rule 17.02(1)(b) of, and paragraph 27 of Appendix D1A to, the
Listing Rules, and paragraph 10 of Part I of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance;
(ii) for remaining grantees other than those set out in (i) above, disclosure will be made, on
an aggregate basis, categorized into lots based on the number of A Shares underlying the
options granted to each individual grantee, being: (1) 1 to 5,000 A Shares, (2) 5,001 to
10,000 A Shares, (3) 10,001 to 15,000 A Shares, and (4) 15,001 to 19,999 A Shares. For
each lot of A Shares under the 2024 Stock Option Incentive Plan, the following details
are disclosed in the prospectus: including (1) aggregate number of grantees and number
of A Shares underlying the options under the 2024 Stock Option Incentive Plan, (2) the
consideration (if any) paid for the grant of the options under the 2024 Stock Option
Incentive Plan, and (3) the exercise period of the options and the exercise price of the
options granted under the 2024 Stock Option Incentive Plan;
(iii) there will be disclosure in the section headed “Appendix VI — Statutory and General
Information — D. 2024 Equity Incentive Plans” in this prospectus for the aggregate
number of Shares underlying the options granted under the 2024 Stock Option Incentive
Plan and the percentage to our total issued share capital represented by such number of
Shares as of the Latest Practicable Date;
(iv) the dilutive effect and impact on earnings per Share upon the full exercise of the options
under the 2024 Stock Option Incentive Plan will be disclosed in the section headed
“Appendix VI — Statutory and General Information — D. 2024 Equity Incentive
Plans”;
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(v) a summary of the major terms of the 2024 Stock Option Incentive Plan will be disclosed
in the section headed “Appendix VI — Statutory and General Information — D. 2024
Equity Incentive Plans”;
(vi) a full list of all the grantees with outstanding options under the 2024 Stock Option
Incentive Plan containing all the particulars as required under Rule 17.02(1)(b) of, and
paragraph 27 of Appendix D1A to, the Listing Rules be made available for public
inspection in accordance with “Documents Delivered to the Registrar of Companies and
Available on Display — Document Available for Inspection” in Appendix VII to this
prospectus;
(vii) the grant of a certificate of exemption under the Companies (Winding Up and
Miscellaneous Provisions) Ordinance from the SFC exempting our Company from strict
compliance with paragraph 10(d) of Part I of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance;
(viii) a full list of all the grantees (including the persons referred to in (i) above) who have
been granted options to subscribe for A Shares under the 2024 Stock Option Incentive
Plan, containing all the details as required under as required under Rule 17.02(1)(b) of
the Listing Rules, and paragraph 10 of Part I of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, be made available for public
inspection in accordance with “Documents Delivered to the Registrar of Companies and
Available on Display — 2. Document Available for Inspection” in Appendix VII to this
prospectus; and
(ix) the particulars of the waiver and the exemption will be disclosed in this prospectus.
We have applied for, and the SFC has granted, a certificate of exemption under section 342A
of the Companies (Winding Up and Miscellaneous Provisions) Ordinance from strict compliance
with paragraph 10(d) of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance on the conditions that:
(i) on an individual basis, full details of the options granted by our Company under the
2024, Stock Option Incentive Plan to (1) each of our Directors, senior management, and
connected persons of our Company and its subsidiaries, and (2) other grantees who have
been granted options to subscribe for 20,000 A Shares or more, are disclosed in the
section headed “Appendix VI — Statutory and General Information — D. 2024 Equity
Incentive Plans” in this prospectus, such details to include all the particulars required
under paragraph 10 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance;
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(ii) in respect of the options granted by our Company under the 2024 Stock Option
Incentive Plan to grantees other than those set out in (i) above, disclosure is made, on
an aggregate basis, categorized into lots based on the number of A Shares underlying the
options granted to each individual grantee, being: (i) 1 to 5,000 A Shares, (ii) 5,001 to
10,000 A Shares, (iii) 10,001 to 15,000 A Shares, and (iv) 15,001 to 19,999 A Shares,
For each lot of A Shares under the 2024 Stock Option Incentive Plan, the following
details are disclosed in the prospectus: (1) aggregate number of grantees and number of
A Shares underlying the options under the 2024 Stock Option Incentive Plan, (2) the
consideration (if any) paid for the grant of the options under the 2024 Stock Option
Incentive Plan; and (3) the exercise period of the options and the exercise price of the
options;
(iii) a full list of all the grantees (including the persons referred to in (i) above) who have
been granted options to subscribe for A Shares under the 2024 Stock Option Incentive
Plan, containing all the details as required under paragraph 10 of Part I of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, be
made available for public inspection in accordance with “Documents Delivered to the
Registrar of Companies and Available on Display — Document Available for
Inspection” in Appendix VII to this prospectus; and
(iv) the particulars of the exemption will be disclosed in this prospectus which will be issued
on or before Friday, February 27, 2026.
W AIVER IN RELATION TO RULE 4.04(1) OF THE LISTING RULES AND EXEMPTION
FROM COMPLIANCE WITH PARAGRAPH 27 OF PART I AND PARAGRAPH 31 OF
PART II OF THE THIRD SCHEDULE TO THE COMPANIES (WINDING UP AND
MISCELLANEOUS PROVISIONS) ORDINANCE
Pursuant to Rule 4.04(1) of the Listing Rules, the accountants’ report contained in this
prospectus must include, inter alia , the consolidated results of the group in respect of each of the
three financial years immediately preceding the issue of this prospectus or such shorter period as
may be acceptable to the Stock Exchange.
Pursuant to section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, a prospectus shall include the matters specified in Part I of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance and set out the reports specified
in Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
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Pursuant to paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, a prospectus must include a statement as to the gross trading
income or sales turnover (as the case may be) of the company during each of the three financial
years immediately preceding the issue of this prospectus as well as an explanation of the method
used for the computation of such income or turnover and a reasonable breakdown of the more
important trading activities.
Pursuant to paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, a prospectus must include a report by the auditor of the
company with respect to, among other things, (i) the profits and losses in respect of each of the
three financial years immediately preceding the issue of this prospectus; and (ii) assets and
liabilities of the group at the last date to which the financial statements of the company were
prepared.
Pursuant to section 342A(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the SFC may issue, subject to such conditions (if any) as the SFC thinks fit, a
certificate of exemption from compliance with the relevant requirements under the Companies
(Winding Up and Miscellaneous Provisions) Ordinance if, having regard to the circumstances, the
SFC considers that the exemption will not prejudice the interests of the investing public and that
compliance with any or all of such requirements would be irrelevant or unduly burdensome or is
otherwise unnecessary or inappropriate.
Appendix II to Chapter 1.1A of the Guide for New Listing Applicants provides the conditions
for granting a waiver from strict compliance with Rule 4.04(1) of the Hong Kong Listing Rules as
follows:
(a) the applicant must list on the Hong Kong Stock Exchange within three months after the
latest financial year end;
(b) the applicant must obtain a certificate of exemption from the SFC on compliance with
section 342(1)(b) of and paragraphs 27 and 31 of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance requirements;
(c) a profit estimate for the latest financial year (which must comply with Rules 11.17 to
11.19 of the Listing Rules) must be included in the prospectus or the applicant must
provide justification why a profit estimate cannot be included in the prospectus; and
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(d) there must be a directors’ statement in the prospectus that there is no material adverse
change to the company’s financial and trading positions or prospects with specific
reference to the trading results from the end of the stub period to the latest financial
year end.
Pursuant to the relevant requirements set out above, our Company is required to produce
three full years of audited accounts for the three years ended December 31, 2025. As such, an
application has been made to the Stock Exchange for a waiver from strict compliance with Rule
4.04(1) of the Listing Rules, and such waiver has been granted by the Stock Exchange on the
conditions that:
(a) this prospectus will be issued on or before Friday, February 27, 2026 and our
Company’s H Shares will be listed on or before March 31, 2026;
(b) inclusion in this prospectus a profit estimate for the financial year ended December 31,
2025 in compliance with Rules 11.17 to 11.19 of the Listing Rules and a Directors’
statement that there is no material and adverse change to the financial and trading
positions or prospects of our Company, with specific reference to the trading results
from October 1, 2025 to December 31, 2025; and
(c) our Company obtains a certificate of exemption from the SFC on strict compliance with
paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
An application has also been made to the SFC for a certificate of exemption from strict
compliance with the requirements under paragraph 27 of Part I and paragraph 31 of Part II of the
Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance and a
certificate of exemption has been granted by the SFC under section 342A of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance on the conditions that (i) the particulars of
the exemption are set out in this prospectus; (ii) this prospectus will be issued on or before Friday,
February 27, 2026 and our Company’s H Shares will be listed on or before March 31, 2026, i.e.
three months after the latest financial year-end.
The applications to the Stock Exchange for a waiver from strict compliance with Rule 4.04(1)
of the Listing Rules and to the SFC for a certificate of exemption from strict compliance with the
requirements under paragraph 27 of Part I and paragraph 31 of Part II of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance have been made on the
grounds, among others, that strict compliance with the above requirements would be unduly
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burdensome and the waiver and exemption would not prejudice the interests of the investing public
as:
(a) there would not be sufficient time for our Company and the reporting accountants of our
Company to finalize the audited financial statements for the year ended December 31,
2025 for inclusion in this prospectus. If the financial information for the year ended
December 31, 2025 is required to be audited, our Company and the reporting
accountants would have to carry out substantial volume of work to prepare, update and
finalize the Accountants’ Report and the prospectus, and the relevant sections of the
prospectus will need to be updated to cover such additional period. This would involve
additional time and costs since substantial work is required to be carried out for audit
purposes. It would be unduly burdensome for the audited results for the year ended
December 31, 2025 to be finalized in a short period of time. Our Directors consider that
the benefits of such work to the existing and prospective Shareholders of our Company
may not justify the additional work and expenses involved and the delay of the Listing
timetable;
(b) the Accountants’ Report for the three years ended December 31, 2024 and the nine
months ended September 30, 2025 has been prepared and is set out in Appendix I to this
prospectus;
(c) our Directors and the Sole Sponsor herein confirm that, after performing all reasonable
due diligence work which they consider appropriate up to the date of this prospectus,
there has been no material adverse change to the financial and trading positions or
prospects of our Group since October 1, 2025 (immediately following the date of the
latest audited statement of financial position in the Accountants’ Report set out in
Appendix I to this prospectus) up to the date of this prospectus and there has been no
event which would materially affect the information shown in the Accountants’ Report
as set out in Appendix I to this prospectus, the financial information section, and the
profit estimate as set out in Appendix IIB to this prospectus and information regarding
our Company’s recent development subsequent to the Track Record Period and up to the
date of this prospectus, since October 1, 2025;
(d) our Company is of the view that the Accountants’ Report covering the three years ended
December 31, 2024 and the nine months ended September 30, 2025, together with the
profit estimate for the year ended December 31, 2025 (in compliance with Rules 11.17
to 11.19 of the Listing Rules) included in this prospectus have already provided the
potential investors with adequate and reasonably necessary information in the
circumstances to form a view on the track record and earnings trend of our Company.
Our Directors confirm that all information which is necessary for the investing public to
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make an informed assessment of the activities, assets and liabilities, financial position,
trading position, management and prospects are included in this prospectus. Therefore,
the waiver and exemption would not prejudice the interests of the investing public; and
(e) our Company will comply with the requirements under Rules 13.49(1) and 13.46(2) of
the Listing Rules in respect of the publication of our annual results and annual report.
Our Company currently expects to issue our annual results and annual report for the
financial year ended December 31, 2025 on or before March 31, 2026 and April 30,
2026, respectively. In this regard, our Directors consider that our Shareholders, the
investing public and potential investors of our Company will be kept informed of the
financial results of our Group for the financial year ended December 31, 2025.
ALLOCATION OF H SHARES TO EXISTING MINORITY SHAREHOLDERS AND THEIR
CLOSE ASSOCIATES
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of the
issuer may only subscribe for or purchase any securities for which listing is sought which are
being marketed by or on behalf of the issuer either in his or its own name or through nominees if
the conditions in Rules 10.03(1) and (2) of the Listing Rules are fulfilled. It is provided in Rule
10.03(1) of the Listing Rules that no securities may be offered to existing shareholders on a
preferential basis and no preferential treatment may be given to them in the allocation of the
securities; and in Rule 10.03(2) that the minimum prescribed percentage of public shareholders
required by Rule 8.08(1) must be achieved.
Paragraph 1C of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to the existing shareholders of the applicant or their close associates, whether in their
own names or through nominees, in the Global Offering unless the conditions set out in Rules
10.03 and 10.04 of the Listing Rules are fulfilled.
Chapter 4.15 of the Guide for New Listing Applicants provides that the Stock Exchange will
consider giving consent and granting waiver from Rule 10.04 of the Listing Rules to an applicant’s
existing shareholders or their close associates to participate in an initial public offering if any
actual or perceived preferential treatment arising from their ability to influence the applicant
during the allocation process can be addressed.
The A shares of our Company have been listed on the Shenzhen Stock Exchange since June
2017. We have a large and widely dispersed public A Share shareholder base.
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We have applied for, and the Stock Exchange has granted, a waiver from strict compliance
with the requirements of Rule 10.04 and paragraph 1C of Appendix F1 to the Listing Rules in
respect of the restrictions on certain existing minority Shareholders who (i) hold less than 5% of
the total number of A Shares in issue of our Company prior to the completion of the Global
Offering; and (ii) are not and will not become (upon the completion of the Global Offering) core
connected persons of our Company or the close associates of any such core connected person
(together, the “ Existing Minority Shareholders ”), to subscribe for or purchase Shares in the
Global Offering, subject to the following conditions:
(i) the Sole Sponsor confirms that each Existing Minority Shareholder to whom our
Company may allocate the H Shares in the Global Offering is interested in less than 5%
of the Company’s total number of A Shares in issue before the Listing;
(ii) the Sole Sponsor confirms that each Existing Minority Shareholder is not, and will not
be, a core connected person of the Company or any close associate of any such core
connected person immediately prior to or following the Global Offering;
(iii) the Sole Sponsor confirms that none of the Existing Minority Shareholders has the right
to appoint a Director and/or have any other special rights;
(iv) the Sole Sponsor confirms that allocation to the Existing Minority Shareholders and/or
their close associates will not affect the ability of the Company to satisfy the public
float requirement as prescribed by the Stock Exchange under Rule 8.08 (as amended and
replaced by Rule 19A.13A) of the Listing Rules or otherwise approved by the Stock
Exchange;
(v) to the best knowledge and belief of our Company and the Sole Sponsor, and based on
discussions between our Company and the Overall Coordinators and confirmations
required to be submitted to the Stock Exchange by the Sole Sponsor, we will confirm to
the Stock Exchange that:
(a) in case of participation as cornerstone investors, no preferential treatment has been,
nor will be, given to the Existing Minority Shareholders and/or their close
associates by virtue of their relationship with our Company, other than the
preferential treatment of assured entitlement under a cornerstone investment
following the principles set out in Chapter 4.15 of the Guide for New Listing
Applicants nor is the Existing Minority Shareholder in a position to exert influence
on the Company to obtain actual or perceived preferential treatment, and the
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Existing Minority Shareholders’ cornerstone investment agreements do not contain
any material terms which are more favorable to the Existing Minority Shareholders
than those in other cornerstone investment agreements; or
(b) in case of participation as placees, no preferential treatment has been, nor will be
given to the Existing Minority Shareholders and/or their close associates nor is the
Existing Minority Shareholder in a position to exert influence on the Company to
obtain actual or perceived preferential treatment, in the allocation process by virtue
of their relationship with our Company;
(vi) in the case of participation as placees, the Overall Coordinators will confirm to the
Stock Exchange that, to the best of its knowledge and belief, no preferential treatment
has been, nor will be, given to any of the Existing Minority Shareholders and/or their
close associates by virtue of their relationship with our Company in any allocation in
the International Offering; and
(vii) the Sole Sponsor will confirm to the Stock Exchange that based on (a) its discussions
with our Company and the Overall Coordinators; and (b) the confirmations provided to
the Stock Exchange by our Company and the Overall Coordinators, and to the best of its
knowledge and belief, it has no reason to believe that the Existing Minority
Shareholders and/or their close associates received any preferential treatment in the
allocation process either as cornerstone investors or as placees by virtue of their
relationship with our Company, other than, in the case of participation as cornerstone
investors, the preferential treatment of assured entitlement under a cornerstone
investment following the principles set out in Chapter 4.15 of the Guide for New Listing
Applicants and details of allocation to the Existing Minority Shareholders and/or their
close associates holding more than 1% of the issued share capital of our Company
immediately prior to the completion of the Global Offering will be disclosed in this
prospectus (for cornerstone investors) and/or allotment results announcement (for both
cornerstone investors and placees) of our Company.
DISCLOSURE OF OFFER PRICE
Paragraph 15(2)(c) of Appendix D1A to the Listing Rules provides that the issue price or
offer price of each security must be disclosed in the prospectus. Pursuant to Paragraph 12 of
Chapter 4.14 of the Guide, the Stock Exchange also allows an indicative offer price range to be
included in the prospectus, as an alternative to the disclosure of a fixed offer price.
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We have applied to the Stock Exchange a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules so that the Company will only disclose the
maximum Offer Price in the Prospectus on the below basis:
(a) the Offer Price will be determined with reference to, among other factors, the closing
price of the Company’s A Shares on the Shenzhen Stock Exchange on the last trading
day on or before the Price Determination Date. Our Company is unable to control the
trading price of our A Shares on the Shenzhen Stock Exchange;
(b) setting a fixed offer price or an offer price range with a low-end may adversely affect
our ability to price our H Shares in the best interests of our Shareholders and the market
price of the A Shares and the Hong Kong Offer Shares;
(c) pursuant to paragraphs 9 and 10(b) of the Third Schedule to the Companies (Winding
Up and Miscellaneous Provisions) Ordinance, the amount payable on application and
allotment on each share, and the price to be paid for shares subscribed for, shall be
specified in the Prospectus, respectively. Disclosure of a maximum offer price complies
with the requirements prescribed under paragraphs 9 and 10(b) of Part A the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance by
providing a clear indication of the maximum subscription consideration a potential
investor shall pay for the Offer Shares; and
(d) a maximum Offer Price will be disclosed in this prospectus. This alternative disclosure
approach would not prejudice the interests of the investing public in Hong Kong.
The Stock Exchange has granted to us a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules on the conditions that (1) in no circumstances will
we set the Offer Price for the Hong Kong Offer Shares be greater than the maximum Offer Price as
stated in the Prospectus; and (2) the Prospectus will disclose:
(a) the maximum Offer Price;
(b) the time for the determination of the Offer Price and the form of its publication;
(c) the historical prices of the Company’s A Shares and trading volume on the Shenzhen
Stock Exchange during the Track Record Period and up to the Latest Practicable Date;
(d) the determinants of the final Offer Price; and
(e) the source for investors to access the latest market price of the Company’s A Shares.
See “Structure of the Global Offering — Pricing and Allocation — Determining the Offer
Price” in this prospectus for the historical prices of our A Shares and trading volume on the
Shenzhen Stock Exchange.
W AIVERS AND EXEMPTIONS
– 102 –


--- page 114 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including any proposed Director who is named as
such in this prospectus) collectively and individually accept full responsibility, includes particulars
given in compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance,
the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws of Hong
Kong) and the Listing Rules for the purpose of giving information with regard to us. Our
Directors, having made all reasonable inquiries, confirm that to the best of their knowledge and
belief the information contained in this prospectus is accurate and complete in all material respects
and not misleading or deceptive, and there are no other matters the omission of which would make
any statement herein or this prospectus misleading.
CSRC FILING
The CSRC issued a notification on December 16, 2025 confirming our completion of the
filing procedures for the Listing and the Global Offering. In issuing such notification, the CSRC
accepts no responsibility for our financial soundness or the accuracy of any of the statements made
or opinions expressed in this prospectus.
INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering, which
forms part of the Global Offering. For applicants under the Hong Kong Public Offering, this
prospectus sets out the terms and conditions of the Hong Kong Public Offering.
The Hong Kong Offer Shares are offered solely on the basis of the information contained and
representations made in this prospectus and on the terms and subject to the conditions set out
herein. No person is authorized to give any information in connection with the Global Offering or
to make any representation not contained in this prospectus, and any information or representation
not contained herein must not be relied upon as having been authorized by our Company, the Sole
Sponsor, the Overall Coordinators, the Joint Global Coordinators, the Capital Market
Intermediaries, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their
respective directors, agents, employees or advisors or any other party involved in the Global
Offering.
The Listing is sponsored by the Sole Sponsor and the Global Offering is managed by the
Overall Coordinators. The Hong Kong Public Offering is fully underwritten by the Hong Kong
Underwriters under the terms and conditions of the Hong Kong Underwriting Agreement and is
subject to our Company and the Overall Coordinators (for themselves and on behalf of the
Underwriters) agreeing on the Offer Price. The International Offering is expected to be fully
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 115 ---
underwritten by the International Underwriters subject to the terms and conditions of the
International Underwriting Agreement, which is expected to be entered into on or around the Price
Determination Date.
If, for any reason, the Offer Price is not agreed among our Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters), the Global Offering will not
proceed and will lapse. For full information about the Underwriters and the underwriting
arrangements, please see “Underwriting” in this prospectus.
Neither the delivery of this prospectus nor any offering, sale or delivery made in connection
with the H Shares should, under any circumstances, constitute a representation that there has been
no change or development reasonably likely to involve a change in our affairs since the date of
this prospectus or imply that the information contained in this prospectus is correct as of any date
subsequent to the date of this prospectus.
Details of the structure of the Global Offering, including its conditions, are set out in
“Structure of the Global Offering,” and the procedures for applying for the Hong Kong Offer
Shares are set out in “How to Apply for Hong Kong Offer Shares” in this prospectus.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his or her acquisition of Hong Kong Offer Shares to, confirm
that he or she is aware of the restrictions on the offer and sales of the Hong Kong Offer Shares
described in this prospectus.
No action has been taken to permit a public offering of the Offer Shares or the general
distribution of this prospectus in any jurisdiction other than in Hong Kong. Accordingly, this
prospectus may not be used for the purposes of, and does not constitute, an offer or invitation in
any jurisdiction or in any circumstances in which such an offer or invitation is not authorized or to
any person to whom it is unlawful to make such an offer or invitation. The distribution of this
prospectus and the offering of the Offer Shares in other jurisdictions are subject to restrictions and
may not be made except as permitted under the applicable securities laws of such jurisdictions and
pursuant to registration with or authorization by the relevant securities regulatory authorities or an
exemption therefrom.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 116 ---
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the listing of, and permission to deal in, the H
Shares to be issued pursuant to the Global Offering. Dealings in the H Shares on the Stock
Exchange are expected to commence on Tuesday, March 10, 2026. Other than our A Shares, which
are currently listed on and dealt in on the Shenzhen Stock Exchange, no part of our equity or debt
securities is listed on or dealt in on any other stock exchange and no such listing or permission to
list is being or proposed to be sought in the near future.
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of, and
permission to deal in, the H Shares on the Stock Exchange is refused before the expiration of three
weeks from the date of the closing of the application lists, or such longer period (not exceeding six
weeks) as may, within the said three weeks, be notified to our Company by or on behalf of the
Stock Exchange.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and we
comply with the stock admission requirements of HKSCC, the H Shares will be accepted as
eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the
Listing Date or any other date as determined by HKSCC. Settlement of transactions between
participants of the Stock Exchange is required to take place in CCASS on the second business day
after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
Investors should seek the advice of their stockbroker or other professional advisors for details
of the settlement arrangement as such arrangements may affect their rights and interests. All
necessary arrangements have been made to enable the H Shares to be admitted into CCASS.
H SHARE REGISTER AND STAMP DUTY
All Offer Shares issued pursuant to applications made in the Global Offering will be
registered on our H Share register to be maintained by our H Share Registrar, Computershare Hong
Kong Investor Services Limited, in Hong Kong. Our principal register of members will be
maintained by us at our headquarters in China.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 117 ---
Dealings in the H Shares registered in our H Share Register will be subject to Hong Kong
stamp duty. For further details of Hong Kong stamp duty, please seek professional tax advice.
PROFESSIONAL TAX ADVICE RECOMMENDED
You should consult your professional advisors if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding or disposing of, or dealing in, the H Shares or
exercising any rights attaching to the H Shares. We emphasize that none of our Company, the Sole
Sponsor, the Overall Coordinators, the Joint Global Coordinators, the Capital Market
Intermediaries, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of our or
their respective directors, officers or representatives or any other person involved in the Global
Offering accepts responsibility for any tax effects or liabilities resulting from your subscription,
purchase, holding or disposing of, or dealing in, the H Shares or your exercise of any rights
attaching to the H Shares.
EXCHANGE RATE CONVERSION
Unless otherwise specified, amounts denominated in Renminbi or U.S. dollars have been
translated, for the purpose of illustration only, into Hong Kong dollars in this prospectus at the
following exchange rates: RMB into U.S. dollars at the rate of US$1.00 to RMB6.9398 and Hong
Kong dollars into RMB at the rate of HK$1.00 to RMB0.8879.
No representation is made that any amounts in Renminbi or U.S. dollars were or could have
been or could be converted into Hong Kong dollars at such rates or any other exchange rates on
such date or any other date.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures preceding them.
LANGUAGE
For ease of reference, the names of Chinese laws and regulations, governmental authorities,
institutions, natural persons or other entities (including certain of our subsidiaries) have been
included in this prospectus in both the Chinese and English languages. In the event of
inconsistency, the Chinese versions shall prevail. English translations of company names and other
terms from the Chinese language are provided for identification purposes only.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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DIRECTORS
Name Residential address Nationality
Executive Directors
Mr. WANG Ping ( ˮ̻) Room 29A, Building 3
Yongshan Mingyuan, Longwei Road
Meilin Street, Futian District
Shenzhen
Guangdong
PRC
Chinese
Mr. DU Guobin ( Ӂ਷੸) Room 904, No. 9, Lane 177
Qiheng Road
Pudong New Area
Shanghai
PRC
Chinese
Mr. XIA Youqing (Ϟᅅ) Room 2204, Xinhaige
Xin’anhu Garden
Xin’an Street, Bao’an District
Shenzhen
Guangdong
PRC
Chinese
Mr. HUANG Min ( රઽ) Room 603, Unit 1, Building 1, Cuijing Yuan
No. 18 Shangbao Road
Lianhua Street, Futian District
Shenzhen
Guangdong
PRC
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 119 ---
Name Residential address Nationality
Independent Non-Executive Directors
D r .M AL i j u n(ࠏRoom 1405, Building 5
Penghua Xiangyu Garden
No. 1001, Longhua New Area Avenue
Shenzhen
Guangdong
PRC
Chinese
Mr. YANG Zheng (݁Room 1202, Unit 1, Building 11
Poly Champagne International
No. 89 Jinshajiang East Street
Jianye District
Nanjing
Jiangsu, PRC
Chinese
Ms. LIU Jia ( ᄎԳ) Flat 26B, Tower 1, One Silversea
18 Hoi Fai Road
Kowloon
Hong Kong
Chinese (Hong
Kong)
Further information about our Directors are set out in “Directors and Senior Management” in
this prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 108 –


--- page 120 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Sole Sponsor China International Capital Corporation Hong
Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Sponsor-Overall Coordinator China International Capital Corporation Hong
Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Overall Coordinators China International Capital Corporation Hong
Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
Joint Global Coordinators China International Capital Corporation Hong
Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 121 ---
China Industrial Securities International Capital
Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Futu Securities International (Hong Kong)
Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
Open Securities Limited
Room 3208-09, 32/F, Tower 6, The Gateway
9 Canton Road, Tsim Sha Tsui
Kowloon
Hong Kong
Joint Bookrunners China International Capital Corporation Hong
Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 0–


--- page 122 ---
China Industrial Securities International Capital
Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Futu Securities International (Hong Kong)
Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
Open Securities Limited
Room 3208-09, 32/F, Tower 6, The Gateway
9 Canton Road, Tsim Sha Tsui
Kowloon
Hong Kong
Joint Lead Managers China International Capital Corporation Hong
Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 111 –


--- page 123 ---
China Industrial Securities International Capital
Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Futu Securities International (Hong Kong)
Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
Open Securities Limited
Room 3208-09, 32/F, Tower 6, The Gateway
9 Canton Road, Tsim Sha Tsui
Kowloon
Hong Kong
Capital Market Intermediaries China International Capital Corporation Hong
Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 2–


--- page 124 ---
China Industrial Securities International Capital
Limited
32/F, Infinitus Plaza
199 Des V oeux Road Central
Sheung Wan
Hong Kong
Futu Securities International (Hong Kong)
Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Tiger Brokers (HK) Global Limited
23/F, Li Po Chun Chambers
189 Des V oeux Road Central
Hong Kong
Open Securities Limited
Room 3208-09, 32/F, Tower 6, The Gateway
9 Canton Road, Tsim Sha Tsui
Kowloon
Hong Kong
Legal Advisors to our Company As to Hong Kong and U.S. laws:
Paul Hastings (Hong Kong) LLP
22/F, Bank of China Tower
1 Garden Road
Hong Kong
As to PRC law:
Han Kun Law Offices
9/F, Office Tower C1
Oriental Plaza
1 East Chang An Ave
Dongcheng District
Beijing
PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 3–


--- page 125 ---
Legal Advisors to the Sole Sponsor and
the Underwriters
As to Hong Kong and U.S. laws:
Jones Day
31/F, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
As to PRC law:
King & Wood Mallesons
28/F, China Resources Tower
2666 Keyuan South Road
Nanshan District, Shenzhen
Guangdong
PRC
Auditor and Reporting Accountants Ernst & Y oung
Certified Public Accountants
Registered Public Interest Entity Auditor
27/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai
Branch Co.
2504 Wheelock Square
1717 Nanjing West Road
Shanghai 200040, China
Receiving Bank CMB Wing Lung Bank Limited
45 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 4–


--- page 126 ---
Registered Office 2/F, No. 5 Lingxia Road
Fenghuang Community
Fuyong Street
Bao’an District, Shenzhen
Guangdong
PRC
Headquarters and Principal Place of
Business in the PRC
32/F, Building B
Shenzhen International Innovation Center
Futian Technology Plaza
No. 1006 Shennan Avenue
Xintian Community, Huafu Street
Futian District, Shenzhen
Guangdong
PRC
Place of Business in Hong Kong 40/F, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Company’s Website www.meigsmart.com
(The information on the website does not form part
of this prospectus)
Joint Company Secretaries Mr. HUANG Min ( රઽ)
32/F, Building B
Shenzhen International Innovation Center
Futian Technology Plaza
No. 1006 Shennan Avenue
Xintian Community, Huafu Street
Futian District, Shenzhen
Guangdong
PRC
CORPORATE INFORMATION
–1 1 5–


--- page 127 ---
Mr. Au Kai Yin ( ᆄ઼ሬ)
(an associate member of both The Hong Kong
Chartered Governance Institute and The Chartered
Governance Institute in the United Kingdom)
40/F, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Authorized Representatives Mr. W ANG Ping ( ˮ̻)
Room 29A, Building 3
Yujing Pavilion Yongshan Mingyuan
Longwei Road
Futian District
Shenzhen
Guangdong
PRC
Mr. Au Kai Yin ( ᆄ઼ሬ)
40/F, Dah Sing Financial Centre
No. 248 Queen’s Road East
Wanchai
Hong Kong
Audit Committee Mr. YANG Zheng (݁)Chairperson)
D r .M AL i j u n(ࠏ)
Ms. LIU Jia ( ᄎԳ)
Remuneration and Appraisal
Committee
D r .M AL i j u n(ࠏ)Chairperson)
Mr. WANG Ping ( ˮ̻)
Mr. YANG Zheng (݁)
Nomination Committee D r .M AL i j u n(ࠏ)Chairperson)
Mr. YANG Zheng (݁)
Ms. LIU Jia ( ᄎԳ)
Strategy Committee Mr. WANG Ping ( ˮ̻) (Chairperson)
D r .M AL i j u n(ࠏ)
Mr. YANG Zheng (݁)
CORPORATE INFORMATION
–1 1 6–


--- page 128 ---
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shop 1712−1716, 17th Floor
Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
Compliance Advisor Somerley Capital Limited
20/F, China Building
29 Queen’s Road Central
Hong Kong
Principal Banks Citibank
34/F, Citigroup Tower
No. 33 Huayuan Shiqiao Road
Lujiazui Financial and Trade Zone
Pudong
Shanghai
PRC
Huaxia Bank
Huaxia Bank Building
No. 22 Jianguomennei Street
Dongcheng District
Beijing
PRC
China Everbright Bank
China Everbright Center
No. 25 Taipingqiao Street
Xicheng District
Beijing
PRC
CORPORATE INFORMATION
–1 1 7–


--- page 129 ---
The data and statistics provided in this section and other sections of the prospectus are
extracted from the report prepared by Frost & Sullivan, which was commissioned by us, as well
as various government publications and other publicly available sources. We engaged Frost &
Sullivan to prepare an independent industry report related to the Global Offering, known as the
Frost & Sullivan Report. We believe that the sources of information contained in this Industry
Overview are appropriate sources for such information and have taken reasonable care in
reproducing such information. We have no reason to believe that such information is false or
misleading or that any material fact has been omitted that would render such information false
or misleading. The information set out in this Industry Overview has not been independently
verified by us, the Sole Sponsor , the Joint Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, any of the Underwriters, any of our or their respective directors, officers,
employees, advisors, agents or representatives or any other party involved in the Global
Offering and no representation is given as to its accuracy.
SOURCE AND RELIABILITY OF INFORMATION
We have commissioned Frost & Sullivan, an independent market research and consulting
company, to conduct an analysis of China’s wireless communication modules industry. Frost &
Sullivan is an independent global consulting firm, founded in 1961 in New York. It offers industry
research and market strategies and provides growth consulting and corporate training. It has over
40 offices worldwide with over 2,000 industry consultants, market research analysts, and
economists. We commissioned Frost & Sullivan for a total fee of RMB350,000 in connection with
the preparation of the market research report (the “ Frost & Sullivan Report ”). We have included
certain information from the Frost & Sullivan Report in this prospectus to provide our potential
investors with a more comprehensive understanding of the industries in which we operate.
During the preparation of the Frost & Sullivan Report, Frost & Sullivan performed both (i)
primary research, which involved in-depth interviews with leading industry participants and
industry experts; and (ii) secondary research, which involved review of company reports,
independent research reports and data based on Frost & Sullivan’s own research database.
Projected data was obtained from historical data analysis plotted against macroeconomic data with
reference to specific industry-related factors. The Frost & Sullivan Report was compiled based on
the following assumptions: (i) China’s economy is likely to maintain a steady growth in the next
decade; (ii) China’s social, economic and political environment is likely to remain stable in the
forecast period from to 2025 to 2029, which ensures the stable and healthy development of the
China’s wireless communication modules industry.
INDUSTRY OVERVIEW
–1 1 8–


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1 MACRO INDUSTRY BACKGROUND
1.1 Wireless Communication Modules are part of the Important Infrastructure of the AI
Intelligent Ecosystem
¾ Development background of wireless communication modules
In the context of continuous deepening of digital transformation and expanding intelligent
applications, the technical form of wireless communication modules has undergone a systematic
evolution from “connection” to “computation”. Early wireless communication modules primarily
handled basic data transmission functions, widely applied in machine-to-machine communication
and early-stage IoT scenarios. With the popularity of 5G cellular networks, they provide faster,
more stable, and more secure wireless connections for application scenarios such as general IoT,
cloud-edge-device, and wireless broadband. On this basis, the accelerated deployment of AI further
changes the functional positioning of wireless communication modules in the system architecture,
driving the accelerated development of module forms with AI processing capabilities.
¾ Cloud-edge-device architecture and data transmission mode
Cloud-edge-device architecture is a distributed model integrating cloud computing, edge
computing, and terminal devices. The cloud is responsible for handling complex computing and
big data storage (such as AI model training), while the edge layer completes local real-time
analysis and wireless broadband connections. The device layer encompasses personal devices and
industry terminals, performing perception, control, and local inference of the physical world. With
AI models increasingly shifting towards the terminal side and the continuous evolution of
edge-cloud collaborative architectures, the data flow between cloud, edge, and device requires
higher network capabilities. FWA and MBB, as next-generation wireless broadband access
methods, based on 5G, 5G-A and 5G RedCap communication standards, provide high-speed
wireless connections for smart terminals, effectively supporting typical application scenarios such
as high-definition video transmission, task command delivery, and real-time data interaction.
INDUSTRY OVERVIEW
–1 1 9–


--- page 131 ---
Cloud Edge
Network Computation Storage
Service
Management
Resource
Invocation
Intelligent
Cockpit
Smart
Phone
Smart
Home
Smart
City
Smart
Retail
Industrial
IoT
SaaS/Network
DB/Storage
LMM
Server
Data
Transmission
(FWA/MBB)
On-device
Robot Digital
Energy
Require High
Bandwidth and
High Reliability,
Gradually
Transitioning to 5G
Edge Controller
Edge Gateway
Edge Server
Edge Manager
Data Lifecycle
Management
Select 4G/5G/5G
RedCap, based on
Realtime/
Cost/Power
Consumption;
5G/5GRedcap Mainly
for High-real-time
Intelligent Terminal
Devices
Data
Transmission
(FWA/MBB)
Personal Terminal
Industry Terminal
Data Center
Public Cloud/
Private Cloud
Edge Infrastructure
Source: Frost & Sullivan
1.2 Core Driving Scenarios Requirements for Module Capabilities in the On-Device
Intelligence Era
¾ On-device AI market size
On-device AI technology deploys AI functions to various terminal devices such as sensors
and IoT terminals, enabling them to perform local data processing and decision-making. The
global on-device AI market has experienced explosive growth, increasing from RMB90.2 billion in
2020 to RMB251.7 billion in 2024, with a CAGR of 29.3%. This growth is expected to accelerate
further, with the market size projected to surge from RMB321.9 billion in 2025 to RMB1,223.0
billion in 2029, achieving a CAGR of 39.6%. The rapid expansion of the on-device AI market is
directly driven by its accelerated adoption in typical scenarios such as general IoT, ICV and
robotics. These fields require local inference, low-latency responses, and intelligent control, which
align closely with the characteristics of on-device AI, forming its primary growth drivers.
INDUSTRY OVERVIEW
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--- page 132 ---
11
/g57
/g57
/g57…
22
33
11
22
11
From
22
From
33
/g57
/g57
/g57
/g57…
/g57
/g57
/g57…
Key Application Scenarios
General IoT
Smart retail equipment, Smart
Logistics
Industrial IoT, Consumer IoT
Sharing Economy
ICV
Intelligent Cockpit
In-Vehicle T-Box
Wireless Broadband Modules
4G/5G FWA
Mobile Broadband
Communication Capabilities
Supporting Intelligent
Scenario Upgrades
The Upgrade Logic of Wireless Communication Modules
From Basic Connectivity to smart application Evolution
From Single Mode to Multi-mode Convergence Evolution
From One-way Upload to on-device Collaboration Evolution
From Communication Components to
Intelligent Converged Platforms Evolution
From Peripheral Connection to Safety Control Hub Evolution
Evolution From Basic Connectivity to High-speed Low-latency
Communication
Evolution From Single Cellular Mode to Multi-protocol Convergence
Evolution From Passive Connection Modules to Network Intelligent Nodes
Source: Frost & Sullivan
¾ Upgrade Logic of Key Application Scenarios of the Wireless Communication Modules in
the On-Device Intelligence Era
 General IoT: The global number of connected devices is rapidly increasing in the era of
on-device intelligence, and is expected to reach tens of billions. Communication
modules are evolving from “simple connectivity” to “local light intelligence,”
performing initial AI inference and status judgment at the terminal. With the maturity of
the terminal-edge-cloud collaborative architecture in the future, modules will possess
data filtering and edge preprocessing capabilities, enabling more efficient collaborative
processing between local and cloud ends.
 ICV: Intelligent cockpit and intelligent connectivity system are core carriers of
on-device intelligence applications in ICV . While 4G in-vehicle modules met basic
requirements for streaming media playback and remote diagnostics. However, in the
on-device intelligence era, wireless communication modules are evolving from 4G to
5G. The wide coverage and high communication capabilities of 5G enable faster,
lower-latency data exchange both inside and outside the vehicle, providing more stable
support for features such as multi-screen interaction, software updates. As such, wireless
communication modules have become critical enablers for the evolution of ICV in the
on-device intelligence era.
INDUSTRY OVERVIEW
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--- page 133 ---
 Wireless Broadband: Globally, wireless broadband access has become the mainstream
choice due to its rapid deployability, controllable costs, and absence of need for
large-scale wired infrastructure. As user demands for high-definition video, real-time
interaction, and remote collaboration continue to rise, communication modules are
accelerating their transition from 4G to 5G, 5G RedCap and 5G-A to deliver higher
bandwidth, lower latency, and better energy efficiency. With the continuous
improvement of 5G network coverage, module functions are evolving from single
connectivity to intelligent network nodes with edge caching, protocol scheduling, and
security management capabilities, serving as the core foundation for supporting the
sustained expansion of the global wireless broadband market.
1.3 Main Application Prospects of Wireless Communication Modules in the AI Era
¾ Current core driving scenarios
 General IoT: The diversity of general IoT terminal types is increasing, covering
numerous sub-sectors such as industrial control and Smart Cities. On-device AI has
become a key pathway to enhance device intelligence levels now, driving module
products to evolve towards integrated computing-power, multi-protocol support, and
edge algorithm adaptation, which imposes higher requirements on modules’ edge
processing capabilities and software-hardware integration. In China, the General IoT
market is experiencing rapid expansion driven by national digital infrastructure policies
and widespread industrial digitalization, resulting in a strong increase in connected
devices, and the ROW market is larger in scale but growing at a steadier pace, mainly
due to the consistent demand from industrial IoT and smart city applications in
developed economies such as North America and Europe.
 ICV: With the rapid penetration of functions such as intelligent cockpit in
mid-to-high-end vehicles, OEMs are placing emphasis on high data rates, low latency,
and local AI inference for in-vehicle modules. In on-device AI tasks such as in-vehicle
multi-modal perception and real-time inference, high-computing-power modules are
gradually replacing traditional communication modules, becoming critical nodes in
intelligent architectures. Particularly in supporting automotive-grade interfaces, modules
face higher comprehensive performance requirements. China’s ICV market is
accelerating due to the rising penetration of intelligent electric vehicles in domestic
brands, driving strong demand for automotive-grade modules; the ROW markets started
earlier and have a larger installed base, but face regulatory constraints and slower model
renewal cycles, resulting in more moderate growth.
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 Wireless Broadband (FW A/MBB): The communication capabilities of wireless
broadband have become foundational for intelligent scenario upgrades, serving as a key
enabler for connecting terminal intelligence and system collaboration. FWA/MBB are
gradually replacing traditional wired broadband access, with rapid growth in demand for
high data rates, multi-user concurrency, and remote management capabilities in
households and enterprises. Wireless communication modules not only need to support
multi-mode fusion communication such as 5G and Wi-Fi 6 but also need to undertake
intelligent functions like user behavior analysis and local data scheduling, driving
modules to evolve towards the “communication + edge intelligence” direction. The
ROW markets, particularly in emerging regions like Southeast Asia and Africa, are
seeing faster growth than China due to limited fixed-line infrastructure and surging
demand for cost-effective broadband alternatives.
The following figure shows the market size of the main downstream industries of
communication modules in the on-device AI field:
IoT Market Size (by Revenue),
China & ROW, 2024 & 2029E
0
100
200
300
400
500
600
700
800
900
1,000
1,100
175.5
499.5
2024
323.3
739.2
2029E
675.0
1,062.5
China ROW
ICV Market Size (by Revenue),
China & ROW, 2024 & 2029E
0
100
200
300
400
500
600
700
800
111.7
136.5
2024
456.0
301.2
2029E
248.2
757.2
China ROW
Wireless Broadband Market Size (by Revenue),
China & ROW, 2024 & 2029E
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
94.6
283.7
2024
190.2
485.4
2029E
378.3
675.6
China ROW
noilliB BMRnoilliB BMRnoilliB BMR
Source: Frost & Sullivan
¾ Future high-potential driving scenarios
 Robots: As AI evolves from perception and understanding to autonomous
decision-making and physical interaction, robots have become the most direct
embodiment of AI modules and edge computing capabilities, widely applied in various
operational scenarios. The demand for real-time and stable local AI inference and
command control in robot terminals drives module products to develop towards
integrating AI computing-power, sensor interfaces, and control scheduling capabilities.
In China, the robotics market is undergoing rapid expansion beyond industrial
applications, with strong policy support and demand surges in service, logistics, and
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public sector use cases; the ROW markets are more concentrated in industrial robots
with slower adoption in non-industrial segments, leading to a narrower application scope
and more moderate growth.
 Servers: Under the backdrop of rapid evolution in large AI models, server architectures
are accelerating their shift from centralized computing-power to edge intelligence. As
critical nodes in server systems responsible for local inference, parameter caching, and
task scheduling, edge servers are increasingly becoming a critical component of the AI
computing-power infrastructure. Edge servers impose higher demands on wireless
communication modules in terms of high-speed data transmission, low latency, and
multi-link reliability, making these module products an essential underlying support
component for the stable operation of edge computing-power. Looking ahead,
next-generation lightweight servers optimized for AI inference acceleration and edge
deployment will widely integrate wireless communication modules. This integration will
not only enable remote manageability and flexible deployment but also unlock
significant market potential within ubiquitous intelligent infrastructure. In China, the
growth of servers is fueled by localized AI deployments, alongside increased demand for
domestically controlled computing infrastructure; the ROW markets benefit from the
large-scale deployment of AI inference workloads by global tech giants, with stronger
momentum in modular edge server adoption and wireless module integration.
 AR/VR: AR/VR devices, as representative forms of the integration of generative AI and
immersive interaction, require support for high-intensity tasks such as
ultra-high-definition video rendering, low-latency feedback, and real-time environmental
sensing, imposing stringent requirements on local computing-power and wireless
communication modules. To meet the collaborative demands of edge image processing
and semantic understanding, module products must possess high-bandwidth, low-latency,
and stable connection capabilities, while supporting multi-protocol access fusion access
to ensure the smoothness and interactivity of cross-scenario immersive experiences.
China’s AR/VR market growth is tempered by limited consumer adoption and
underdeveloped high-end hardware ecosystems, with demand concentrated in education
and cultural tourisms; By contrast, ROW markets, particularly North America, are
experiencing faster growth supported by flagship product launches from global tech
giants and the convergence of generative AI and immersive interaction.
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The following figure shows the market size of future core driving scenarios:
Robotics Market Size (by Revenue),
China & ROW, 2024 & 2029E
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
185.4
209.1
2024
928.0
872.0
2029E
394.5
1,800.0China ROW
Servers Market Size (by Revenue),
China & ROW, 2024 & 2029E
0
500
1,000
1,500
2,000
291.7
584.0
2024
540.2
1,260.4
2029E
875.7
1,800.6
RMB Billion
China ROW
0
20
40
60
80
100
120
140
160
180
200
220
240
260
280
25.6
81.0
2024
73.6
204.3
2029E
106.6
277.9RMB Billion
China ROW
RMB Billion
AR/VR Market Size (by Revenue),
China & ROW, 2024 & 2029E
Source: Frost & Sullivan
2 GLOBAL WIRELESS COMMUNICATION MODULE MARKET OVERVIEW
2.1 Definition, classification and introduction of wireless communication modules
¾ Definition of wireless communication modules
Communication modules refer to integrated hardware units that combine baseband chips, RF
chips and related components to provide plug-and-play cellular or short-range wireless
communication functions for terminal products. Among them, wireless communication modules
integrate core elements such as RF transceivers, baseband processors, antenna interfaces, and
protocol stacks, providing communication and local computing functions, and supporting
application scenarios such as general IoT, ICV , wireless broadband and robotics. Wireless
communication module can be classified into data transmission modules and smart modules based
on their functions and levels of intelligence.
¾ Data transmission modules
Data transmission modules refer to traditional wireless communication modules primarily
responsible for data transmission. It focuses on secure and high-throughput data exchange
prioritizing the reliable connection of raw or pre-processed data transmitted between edge devices
and integrated systems. These modules can be categorized by network standards into different
types such as 2G, 3G, 4G and 5G, among which 4G and 5G modules currently dominate the
market.
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¾ Smart Modules
Smart modules refer to hardware modules that integrate application processors (CPU),
operating systems and open development environments on top of traditional wireless
communication modules. They enable terminal devices to perform local data processing, image
rendering and application execution and other edge intelligence capabilities. While smart modules
have evolved to provide enhanced computing power and open operating environments, they
fundamentally retain wireless connectivity functions inherited from traditional communication
modules. Therefore, they are recognized in the industry as a core sub-category of wireless
communication modules, despite their extended capabilities beyond connectivity.
The industry typically classifies smart modules based on chip platforms, integrated systems
and computing-power scale. With the development of downstream customer needs, the integrated
computing-power measured by TOPS has gradually become an important criterion for smart
modules while the presence of communication capabilities is no longer a necessary condition for
defining smart modules.
 Regular smart module: Primarily used to support lightweight applications such as
basic data collection, edge control, audio and video playback, and graphical user
interface (GUI) interaction. They typically employ mid-to-low power consumption CPU
platforms and are suited for scenarios with lower computational demands, such as smart
wearables and smart home systems, with a focus on balancing system integration and
cost efficiency.
 High-computing-power smart module: refers to a smart module integrating a
computing power of 8 TOPS or above, with dedicated AI accelerators like TPU and
NPU embedded, capable of performing machine learning inference on-device or hosting
AI models. This kind of module achieves efficient real-time analysis and processing by
locally loading and optimizing pre-trained models. Supported by such computing power,
terminal devices can perform intelligent processing of high-density information at the
edge or locally. This significantly reduces reliance on cloud resources, enhances system
responsiveness and data privacy protection, and strongly supports AI deployment across
various terminals. The industry generally regards 8 TOPS as the technical threshold for
high-computing-power smart modules. Mainstream scenarios that need 8 TOPS or higher
computing power for stable deployment and effective commercial operation include,
intelligent cockpit interactive AI model deployment, and XR device-side generative
image model deployment.
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The following table sets out the categories and characteristics of wireless communication
modules:
Data transmission
module Smart module High-computing-power smart module
Components . Baseband chips,
memory chips,
RF chips
SoC (integrated
CPU, GPU),
supporting memory
chips, RF chips,
PCBs, power
management chips
High-performance SoC (integrated
NPU or AI accelerator),
supporting large-capacity memory
chips, RF chips, PCBs, power
management chips
Local
processing
capability .
Weak Equipped with a
general-purpose
CPU, it supports
basic applications
such as
multimedia,
multiple cameras,
and multi-screen
display
Integrated with high-performance
heterogeneous computing units, it
supports on-device complex AI
model inference and features edge
intelligence capabilities such as
high-density data processing and
image recognition
Smart
application
capability .
Weak It can run smart
functions, such as
simple recognition
and basic speech
processing
It can deploy complex AI models
locally, including tasks such as
multi-stream video analysis, target
detection, multimodal perception
fusion
Computing
power ....
Ŋ <8 TOPs ≥8 TOPs
Source: Frost & Sullivan
2.2 Wireless Communication Module Industry Value Chain Analysis
¾ The wireless communication module industry chain comprises three segments: upstream
dominated by core components such as baseband chips and RF chips, primarily supplied
by chipmakers and component vendors; midstream providing standardized module
designs and customized solutions, led by module suppliers specializing in hardware and
software integration; downstream connecting to end-application scenarios including
general IoT, ICV , wireless broadband, and robotics.
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¾ Positioned in the midstream of the value chain, wireless communication modules serve
as the vital link between upstream chips and downstream application scenarios. Their
core function is to integrate various key components, such as baseband chips, RF
devices, antennas, and memory, through hardware and software integration, and
encapsulate them into standardized or customized module products that deliver stable
and high-performance wireless communication capabilities, making it easier for
downstream terminal manufacturers to quickly deploy them in various smart devices.
Wireless communication modules not only perform the important functions of technical
integration and system adaptation, but also serve as a critical enabler for the large-scale
deployment of advanced communication technologies such as 5G and IoT.
¾ As downstream customers’ requirements for product intelligence, customization, and
integration continue to rise, wireless communication module enterprises not only need to
provide connectivity capabilities but also possess comprehensive technical capabilities
such as system integration, heterogeneous computing power deployment, and software
adaptation. The locus of value creation is gradually shifting from upstream standard chip
suppliers to midstream module manufacturers, with modules becoming a key hub for
facilitating collaborative innovation between upstream and downstream players and
driving application implementation.
UpstreamUpstream MidstreamMidstream
ChipsChips
Baseband chips
RF chips
Memory chips
PCBPCBs
Structural component
DownstreamDownstream
ICV
Others
Baseband chips
RF chips
Memory chips
Structural components
Wireless Communication
Module
General IoT
Such as smart logistics, smart retail device,
smart city
Such as Intelligent Cockpit , In-vehicle T-Box
Wireless Broadband (FWA/MBB)
Such as 4G/5G FWA
Source: Frost & Sullivan
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2.3 Global Wireless Communication Module Market Size Analysis, 2020-2029E
¾ The global wireless communication module market has witnessed rapid growth,
expanding from RMB32.3 billion in 2020 to RMB43.6 billion in 2024, with a CAGR of
7.7%. From a regional perspective, China’s market size has surpassed that of the rest of
the world, growing from RMB17.4 billion in 2020 to RMB24.7 billion in 2024,
achieving a CAGR of 9.1% during the period. The global high-tech industry’s
accelerated growth has driven the wireless communication module market to expand
continuously. Rising customer demand for highly customized and higher-value-added
solutions has pushed wireless communication module companies to develop more
technology-intensive products for higher profits. The global market is expected to
experience accelerated growth. From 2025 to 2029, it is expected to grow at a CAGR of
10.6%, reaching RMB72.6 billion by 2029, exceeding its historical growth rate.
Meanwhile, Chinese enterprises’ leading position in manufacturing has resulted in
China’s demand for wireless communication modules to exceed the global average.
China is projected to achieve a CAGR of 12.7% during the same period, surpassing
other regions. By 2029, its market size is expected to reach RMB45.5 billion.
CAGR
Total 7.7% 10.6%
China 9.1% 12.7%
ROW 6.1% 7.3%
RMB Billion
0
10
20
30
40
50
60
70
55
65
75
15
5
25
35
45
17.4
14.9
2020
19.6
16.6
2021
20.6
16.7
2022
21.7
17.8
2023
24.7
18.9
2024
28.2
20.4
2025E
31.9
27.1
2029E
32.3
36.2 37.3 39.5
22.0
48.6
53.9
59.6
66.0
72.6
36.0
2026E
23.6
2027E
40.7
25.3
2028E
45.5
43.6
China ROW
Global Wireless Communication Module Market Size, 2020–2029E, by Revenue
2025E–2029E2020–2024
Source: Frost & Sullivan
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2.4 Global and China’s Wireless Communication Module Market Size Analysis by Type,
2020-2029E
¾ By wireless communication module type, the market size for data transmission modules
increased from RMB26.6 billion in 2020 to RMB34.6 billion in 2024, representing a
CAGR of 6.7%. Given the anticipated growth in downstream demand, the data
transmission module market is projected to accelerate, growing from RMB37.4 billion in
2025 to RMB50 billion in 2029, representing a CAGR of 7.5%. Driven by the rapid
adoption of lightweight smart module applications like digital payment and smart home,
the global regular smart modules market is expected to increase from RMB6.3 billion in
2025 to RMB11.1 billion in 2029, representing a CAGR of 15.1%. However, with the
rapid deployment of high-complexity AI tasks such as large models, video structuring
and local generation at the edge, industry demands for module computing-power have
significantly increased. This has led to a shift of some applications from regular smart
modules to high-computing-power smart modules, leading to a migration of the growth
potential of smart modules more towards high-computing-power smart modules. For
instance, in the field of ICVs, T-Box units that previously required only basic
connectivity are now expected to support advanced functions such as real-time voice
interaction, high-definition streaming, pushing automakers to replace regular smart
modules with high-computing power smart modules. In comparison, the
high-computing-power smart module market increased from RMB1.4 billion in 2020 to
RMB3.5 billion in 2024, representing a CAGR of 29.2%. It is projected to expand from
RMB4.9 billion in 2025 to RMB11.5 billion in 2029, representing a CAGR of 23.9%,
due to the surge in high-computing-power applications in the AI field.
Global Wireless Communication Module Market Size (by Module Type), 2020–2029E, by Revenue
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
4.3
1.4
2020
29.6
5.2
1.5
2021
30.0
5.6
1.6
2022
32.3
5.5
1.8
2023
34.6
5.5
3.5
2024
37.4
6.3
4.9
2025E
40.3
7.3
6.3
2026E
43.2
8.4
7.9
2027E
46.5
9.6
26.6
2028E
50.0
11.1
11.5
2029E
32.3
36.2
9.8
39.5
43.6
48.6
53.9
59.6
66.0
72.6
37.3
Data transmission module Regular smart module High-computing-power smart module
RMB Billion CAGR 2020-2024 2025E-2029E
Total 7.7% 10.6%
Data transmission module 6.7% 7.5%
Smart module 21.2% 19.1%
• Regular smart module 6.4% 15.1%
 High-computing-power smart module 25.9% 23.9%
Source: Frost & Sullivan
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In line with the global trend, China’s wireless communication modules market has grown
steadily across data transmission, regular smart modules and high-computing-power smart
modules, supported by the migration from 4G to 5G, the adoption of RedCap, the rise of
AI-enabled applications, as well as favorable policies, a complete industry chain.
By segment, the market size for data transmission modules increased from RMB14.4 billion
in 2020 to RMB19.3 billion in 2024, representing a CAGR of 7.7% during 2020 to 2024, and is
expected to further expand to RMB28.7 billion by 2029 with a CAGR of 8.1% during 2025 to
2029. The market for regular smart modules grew from RMB2.5 billion in 2020 to RMB3.2 billion
in 2024, recording a CAGR of 6.3% during 2020 to 2024, and is forecasted to reach RMB8.3
billion by 2029 with a CAGR of 19.6% during 2025 to 2029. The high-computing-power smart
modules market expanded rapidly from RMB0.5 billion in 2020 to RMB2.2 billion in 2024,
achieving a CAGR of 38.1% during 2020 to 2024, and is projected to reach RMB8.5 billion by
2029 with a CAGR of 28.9% during 2025 to 2029.
China’s Wireless Communication Modules Market Size (by Module Type), 2020–2029E, by Revenue
0
5
10
15
20
25
30
35
40
45
50
2.50.5
2020
16.0
2.7
0.9
2021
16.6
3.0
1.0
2022
17.8
2.9
1.0
2023
19.3
3.2
2.2
2024
21.0
4.0
3.1
2025E
22.8
4.9
4.2
2026E
24.6
5.8
5.6
2027E
26.6
7.0
7.1
2028E
14.4
8.3
8.5
2029E
17.4
19.6 20.6
28.7
24.7
28.1
31.9
36.0
40.7
45.5
21.7
Data transmission module Regular smart module High-computing-power smart module
RMB Billion CAGR 2020–2024 2025E–2029E
Total 9.1% 12.7%
Data transmission module 7.7% 8.1%
Smart module 14.7% 23.9%
 Regular smart module 6.3% 19.6%
 High-computing-power smart module 38.1% 28.9%
Source: Frost & Sullivan
2.5 Global and China’s Wireless Communication Module Market Size Analysis by
Downstream Application, 2020-2029E
¾ In terms of downstream application scenarios for wireless communication modules, the
market size of wireless communication modules for general IoT scenarios grew from
RMB16.8 billion in 2020 to RMB22.0 billion in 2024, representing a CAGR of 6.9%.
Due to the anticipated expansion of niche application scenarios in the general IoT
sector, the growth of the market size of the general IoT sector is projected to accelerate,
increasing from RMB24.2 billion in 2025 to RMB33.8 billion in 2029, representing a
CAGR of 8.7%. Driven by continuous advancements in intelligent connected vehicle
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technologies, particularly the proliferation of in-vehicle infotainment, demand for
wireless communication modules will surge significantly to support high-speed data
transmission, low-latency communication, and multi-device coordination. The market
size for wireless communication modules in intelligent connected vehicle scenarios grew
from RMB2.3 billion in 2020 to RMB5.0 billion in 2024, representing a CAGR of
21.3%. As the penetration rate of ICV in the existing vehicle market continues to rise,
the demand for wireless communication modules in ICV will expand simultaneously. It
is expected that market growth in the ICV sector will continue to accelerate, increasing
from RMB6.7 billion in 2025 to RMB15.9 billion in 2029, representing a CAGR of
24.0%. Meanwhile, with the accelerated deployment of FWA/MBB in household
broadband substitution and enterprise wireless access, the demand for high-performance,
multi-standard integrated wireless communication modules in wireless broadband
continues to grow. It is expected that the market size of the wireless broadband sector
will grow from RMB11.6 billion in 2025 to RMB15.5 billion in 2029, representing a
CAGR of 7.5%.
Global Wireless Communication Module Market Size (by Downstream Application Scenarios), 2020–2029E, by Revenue
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
2.3
8.1
5.1
2020
19.1
2.9
8.7
5.5
2021
19.3
3.4
9.3
5.3
2022
19.5
4.3
10.0
5.7
2023
22.0
5.0
10.8
5.8
2024
24.2
6.7
11.6
6.1
2025E
26.4
8.3
12.5
6.7
2026E
28.8
10.2
13.4
7.2
2027E
31.2
12.9
16.8
7.5
2028E
33.8
15.9
15.5
7.4
2029E
32.3
14.4
37.3 39.5
43.6
48.6
53.9
59.6
66.0
72.6
36.2
General IoT ICV Wireless Broadband Others
CAGR 2020–2024 2025E–2029E
Total 7.7% 10.6%
General IoT 6.9% 8.7%
ICV 21.3% 24.0%
Wireless Broadband 7.4% 7.5%
Others 3.1% 4.6%
RMB Billion
Source: Frost & Sullivan
China’s wireless communication modules market by application scenarios presents several
distinctive characteristics. In the General IoT segment, the market size increased from RMB9.4
billion in 2020 to RMB12.4 billion in 2024, representing a CAGR of 7.3% during 2020 to 2024,
and is expected to reach RMB20.0 billion by 2029 with a CAGR of 10.1% during 2025 to 2029.
China demonstrates particularly large application scale, where the extensive deployment of
standardized IoT use cases results in a market size and growth trajectory broadly consistent with
global trends but with higher deployment density. In the ICV segment, the market size expanded
from RMB1.6 billion in 2020 to RMB3.1 billion in 2024, representing a CAGR of 17.3% during
2020 to 2024, and is projected to reach RMB10.4 billion by 2029 with a CAGR of 27.5% during
2025 to 2029. In the wireless broadband segment, the market size grew from RMB3.9 billion in
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2020 to RMB5.2 billion in 2024, representing a CAGR of 7.3% during 2020 to 2024, and is
forecasted to reach RMB7.9 billion by 2029 with a CAGR of 8.7% during 2025 to 2029, with the
overall growth trend being consistent with the global market.
China’s Wireless Communication Module Market Size (by Downstream Application Scenarios), 2020–2029E, by Revenue
0
5
10
15
20
25
30
35
40
45
50
1.6
3.9
2.5
2020
10.7
1.8
4.3
2.8
2021
10.9
2.3
4.6
2.8
2022
11.0
2.7
4.7
3.3
2023
12.4
3.1
5.2
4.0
2024
13.6
3.9
5.7
5.0
2025E
15.0
5.0
6.2
5.7
2026E
16.5
6.4
6.7
6.4
2027E
18.2
8.2
9.4
7.0
2028E
20.0
10.4
7.9
7.2
2029E
17.4
7.3
20.6 21.7
24.7
28.2
31.9
36.0
40.7
45.5
19.6
General IoT ICV Wireless Broadband Others
CAGR 2020–2024 2025E–2029E
Total 9.1% 12.7%
General IoT 7.3% 10.1%
ICV 17.3% 27.5%
Wireless Broadband 7.3% 8.7%
Others 12.1% 9.7%
RMB Billion
Source: Frost & Sullivan
2.6 Price trends of key cost components of wireless communication modules
The key cost components of wireless communication modules mainly include memory chips,
SoCs, RF chips, PCBs and PMICs.
 Memory chips: The market for memory chips is known for its cyclical and often sharp
price fluctuations. For example, price of memory chips experienced a period of price
declines in 2022 and 2023 due to market overcapacity and weak consumer demand, and
began to rebound in 2024 and 2025, driven by factors including surging demand for AI
servers and production cuts by major manufacturers. Prices are expected to trend upward
in the near term on tight supply for mainstream products.
 SoCs: Adjusted downward in 2023 but remained at a relatively high level through 2024.
Prices are expected to stay structurally elevated due to persistently high wafer and
packaging costs.
 RF chips: Weakened in 2023 and showed a mild recovery in 2024. Future pricing will
largely follow terminal demand with potential upgrades driven by next-generation
wireless standards.
 PCBs: Softened in 2023 and rebounded in 2024 alongside higher copper prices. Future
trends remain highly sensitive to commodity price movements.
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 PMICs: Prices normalized in 2023 and stabilized in 2024. Prices are expected to remain
broadly stable, underpinned by structural demand from automotive and industrial
applications.
2.7 Development Trends of Wireless Communication Modules
¾ 5G RedCap and 5G-A standard accelerates the evolution of wireless communication
modules 5G RedCap is a lightweight 5G standard designed for medium-speed IoT
scenarios. By addressing the high power consumption, cost, and size of traditional 5G
modules, RedCap lowers deployment barriers and accelerates the shift from 4G to 5G in
cost-sensitive applications. Compared with conventional 5G modules, RedCap retains
essential performance while streamlining RF and protocol design, enhancing
cost-efficiency. It is now widely adopted in use cases such as logistics tracking and
smart wearables, supporting broader 5G-A adoption across the IoT ecosystem. 5G-A
drives the performance frontier of 5G networks and paves the way toward 6G. In
parallel, 5G RedCap offers a cost-effective, lightweight 5G option for medium-speed
IoT applications. By simplifying hardware and reducing power consumption, RedCap
lowers the barriers to 5G adoption in scenarios like logistics tracking and smart
wearables. 5G-A and RedCap enable wireless modules to meet diverse performance and
cost requirements, speeding up the industry-wide shift from 4G to 5G.
¾ ICV have become key application scenarios for 5G communications: The sector of
ICV is one of the application scenarios with the fastest penetration and best
development of 5G communication modules. In 2024, the shipment volume of 5G
in-vehicle modules in the ICV related sector reached approximately 2.51 million units.
With the continuous evolution of the increasing demand for low-latency and
high-bandwidth communication capabilities, the shipment volume of this market is
expected to reach approximately 5.27 million units by 2029, representing a CAGR of
16%.
¾ Module functions evolve towards smart integration: Wireless communication modules
are shifting from traditional connectivity — focused components to integrated intelligent
components that combine communication, computing, and management. On one hand,
module products are gradually introducing capabilities such as local processing, data
preprocessing, and OTA updates, enhancing their independent operational capability and
system support capability in general IoT terminals; on the other hand, with the growing
demand for collaborative device-platform management, the access capability of modules
is also evolving toward platformization, assuming more remote configuration and
platform management functions, and becoming key access nodes in the general IoT
ecosystem.
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3 GLOBAL DATA TRANSMISSION MODULE, SMART MODULE AND
HIGH-COMPUTING-POWER MODULE MARKET OVERVIEW
3.1 Analysis of Data Transmission Module
Data transmission modules primarily provide stable connectivity for terminal devices across
various IoT scenarios. They are widely used in high-volume applications such as wireless
broadband terminals and industrial monitoring devices, where the key requirements are low
latency, large-scale deployment and cost efficiency rather than advanced on-device processing.
Benefiting from the ongoing expansion of IoT endpoints and the global transition from legacy
2G/3G networks to LTE and 5G technologies, the data transmission module market has maintained
steady growth in recent years and is expected to remain a core segment of the wireless
communication module industry over the medium term.
3.2 Global and China’s Data Transmission Module Market Size Analysis by Downstream
Application, 2024-2029E
From the perspective of downstream application scenarios, General IoT, wireless broadband,
and ICV currently account for the majority of the data transmission module market. Specifically,
benefiting from the steady increase in connected device deployments across industrial, consumer,
and infrastructure sectors, the market size of data transmission modules for General IoT is
expected to grow from RMB17.0 billion in 2024 to RMB24.4 billion in 2029, representing a
CAGR of 7.5%. Demand from the ICV is anticipated to accelerate significantly, with market size
increasing from RMB3.2 billion in 2024 to RMB6.4 billion in 2029, reflecting a CAGR of 15.0%
driven by the rapid adoption of vehicle connectivity solutions in NEVs and smart transportation
systems. Wireless broadband applications are expected to rise from RMB10.8 billion in 2024 to
RMB15.5 billion in 2029, representing a CAGR of 7.5%, supported by continuous upgrades of
fixed wireless access and home CPE devices.
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Global Data Transmission Module Market Size (by Downstream Application), 2024−2029E
RMB Billion
0
5
10
15
20
25
30
35
40
45
50
55
3.2
10.8
3.6
2024
18.3
3.7
11.6
3.9
2025E
19.6
4.2
12.5
4.0
2026E
21.1
4.9
13.4
3.9
2027E
22.7
5.6
14.4
3.8
17.0
24.4
6.4
15.5
3.7
2029E2028E
37.4
40.3
43.2
46.5
50.0
34.6
General IoT ICV Wireless Broadband Others
CAGR 2024−2029E
Total 7.7%
General IoT 7.5%
ICV 15.0%
Wireless Broadband 7.5%
Others 0.7%
Source: Frost & Sullivan
In line with the global market, China’s data transmission modules show a broadly consistent
growth trajectory across major application scenarios. The market size for General IoT is expected
to increase from RMB10.6 billion in 2024 to RMB15.9 billion in 2029, representing a CAGR of
8.5%. The ICV segment is projected to expand from RMB2.0 billion in 2024 to RMB4.2 billion in
2029, with a CAGR of 16.5%. The wireless broadband segment is forecasted to rise from RMB3.2
billion in 2024 to RMB4.5 billion in 2029, representing a CAGR of 7.3%.
China’s Data Transmission Module Market Size (by Downstream Application), 2024–2029E
RMB Billion
0
5
10
15
20
25
30
2.0
3.2
3.5
2024
11.5
2.3
3.4
3.8
2025E
12.5
2.7
3.6
4.0
2026E
13.5
3.1
3.9
4.1
2027E
14.7
3.6
4.2
4.1
2028E
15.9
10.6
4.5
4.1
2029E
19.3
4.2
22.8
24.6
26.6
28.7
21.0
General IoT ICV Wireless Broadband Others
CAGR 2024–2029E
Total 8.2%
General IoT 8.5%
ICV 16.5%
Wireless Broadband 7.3%
Others 2.4%
Source: Frost & Sullivan
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3.3 Analysis of Regular Smart Module Market
With the rapid expansion of general IoT device deployment, regular smart module has been
widely adopted in real-time and cost-sensitive scenarios such as smart gateways and wearable
devices, leveraging their balance of connectivity and edge processing capabilities. Their openness
and customizability make them the standardized module choice for intelligent device
implementation across multiple industries, and the market size has been steadily growing with the
expansion of terminal types.
3.4 Global and China’s Regular Smart Module Market Size Analysis by Downstream
Application, 2024-2029E
From the perspective of downstream application scenarios, General IoT and ICV are expected
to remain the primary drivers of the regular smart module market over the forecast period. The
General IoT segment is projected to grow steadily, with market size increasing from RMB3.6
billion in 2024 to RMB4.8 billion in 2029, representing a CAGR of 6.1%, supported by wider
adoption of smart gateways, POS terminals and other mid-tier intelligent devices. The ICV is
anticipated to expand rapidly, rising from RMB0.4 billion in 2024 to RMB5.4 billion in 2029,
representing a CAGR of 67.9% as the penetration of intelligent cockpit, and edge-computing
vehicle modules accelerates. Other applications are expected to decline from RMB1.5 billion in
2024 to RMB0.9 billion in 2029, with a negative CAGR of 10.5%, mainly due to the transition of
certain application scenarios from regular smart modules to higher-performance module solutions,
many applications requiring real-time decision-making, or AI workloads are increasingly adopting
high-computing-power smart modules.
Global Regular Smart Module Market Size (by Downstream Application), 2024−2029E
RMB Billion
0
1
2
3
4
5
6
7
8
9
10
11
12
0.4
1.5
2024
3.8
1.3
1.2
2025E
4.1
1.8
1.4
2026E
4.5
2.3
1.6
2027E
4.9
3.6
1.1
2028E
3.6 5.4
0.9
2029E
5.5
4.8
7.3
8.4
9.6
11.1
6.3
General IoT ICV Others
CAGR 2024−2029E
Total 15.1%
General IoT 6.1%
ICV 67.9%
Others -10.5%
Source: Frost & Sullivan
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In line with global trends, General IoT and ICV are also the primary drivers of the regular
smart module market in China. The General IoT segment is expected to grow from RMB2.4 billion
in 2024 to RMB4.4 billion in 2029, representing a CAGR of 12.7%, supported by the continuous
expansion of China’s IoT industry and large-scale deployment of diversified application scenarios.
The ICV segment is projected to expand from RMB0.3 billion in 2024 to RMB3.5 billion in 2029,
representing a CAGR of 68.0%, reflecting the rapid adoption of intelligent cockpit functions and
edge-computing modules.
China’sRegular Smart Module Market Size (by Downstream Application), 2024–2029E
RMB Billion
1
2
3
4
5
6
7
8
9
0
2.4
0.3
0.5
2024
2.7
0.4
0.9
2025E
3.1
0.7
2026E
3.5
1.2
1.1
2027E
3.9
2.1
1.0
2028E
4.4
3.5
0.4
2029E
3.2
4.0
4.9
5.8
7.0
8.3
1.1
General IoT ICV Others
CAGR 2024–2029E
Total 21.2%
General IoT 12.7%
ICV 68.0%
Others -3.6%
Source: Frost & Sullivan
3.5 Analysis of High-Computing-Power Smart Module Market
Facing complex AI application requirements such as semantic understanding, image
structuring, and natural language processing, high-computing-power smart modules, relying on AI
computing power exceeding or equal to 8 TOPS, have become key carriers for realizing terminal
side intelligence in emerging scenarios like in-vehicle terminals and robots. As technologies such
as generative AI and edge large models further drive the sinking of computing power,
high-computing-power smart module are driving the smart module market to expand into more
cutting-edge fields.
3.6 Global and China’s Market Size Analysis of High-Computing-Power Smart Module by
Downstream Application, 2024-2029E
From the perspective of the downstream application structure of high-computing-power smart
modules, general IoT and intelligent connected vehicles currently serve as the primary application
domains and contribute the most to the high-computing-power smart module market. Specifically,
benefiting from the accelerated advancement of edge intelligence and terminal device upgrades,
the market for high-computing-power smart module applied in the general IoT industry is expected
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to grow from RMB1.4 billion in 2024 to RMB4.6 billion in 2029, representing a CAGR of 26.7%.
The market size of high-computing-power smart modules for this sector will increase from
RMB1.4 billion in 2024 to RMB4.0 billion in 2029, representing a CAGR of 22.7%.
In addition, as emerging application directions with long-term growth potential, robotics are
expected to achieve rapid development with the release of demands for smart unmanned systems
and multi-modal perception. The market size of high-computing-power smart module for robotics
is expected to increase from RMB0.2 billion in 2024 to RMB2.0 billion in 2029, representing a
CAGR of 56.0%.
Global High-Computing-Power Smart Module Market Size (by Downstream Application), 2024–2029E
0
1
2
3
4
5
6
7
8
9
10
11
12
1.4
0.20.5
2024
2.1
1.8
0.5
0.5
2025E
2.6
2.3
0.8
0.6
2026E
3.2
3.0
1.1
0.6
2027E
3.6
3.7
1.7
0.8
1.4
4.6
4.0
2.0
0.9
2029E2028E
4.9
6.3
7.9
9.8
11.5
3.5
General IoT ICV Robotics Others
CAGR 2024–2029E
Total 26.7%
General IoT 26.7%
ICV 22.7%
Robotics 56.0%
Others 15.0%
RMB Billion
* Driven by the rapid development of embodied intelligence, robotics has become a key application scenario for
high-computing-power smart modules
Source: Frost & Sullivan
In line with global trends, General IoT, ICV and robotics are the primary application domains
for high-computing-power smart modules in China. The General IoT segment is expected to grow
from RMB0.9 billion in 2024 to RMB3.4 billion in 2029, representing a CAGR of 31.1%, driven
by the large-scale deployment of IoT devices in China and the increasing demand for computing
power arising from the integration of AI into IoT applications. The ICV segment is projected to
expand from RMB0.9 billion in 2024 to RMB3.1 billion in 2029, representing a CAGR of 27.8%.
The robotics segment is forecasted to grow from RMB0.2 billion in 2024 to RMB1.3 billion in
2029, representing a CAGR of 52.5%, reflecting robust momentum as China accelerates the
adoption of unmanned systems and robots.
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China’s High-Computing-Power Smart Module Market Size (by Downstream Application), 2024–2029E
RMB Billion
0
1
2
3
4
5
6
7
8
9
0.9
0.20.2
2024
1.2
1.2
0.30.4
2025E
1.8
1.5
0.4
0.5
2026E
2.4
2.1
0.6
0.4
2027E
2.9
2.7
0.9
0.6
2028E
3.4
0.9 1.3
0.7
2029E
2.2
3.1
4.2
5.5
7.1
8.5
3.1
General IoT ICV Robotics Others
CAGR 2024–2029E
Total 31.8%
General IoT 31.1%
ICV 27.8%
Robotics 52.5%
Others 28.5%
Source: Frost & Sullivan
3.7 Market Drivers for High-computing-power Smart Modules
¾ The “computing-power as a service” concept has been widely accepted:
High-computing-power smart modules not only support the intelligent experience of end
products but also create new revenue streams for customers on the business side. With
the implementation of the “computing-power as a service” concept,
high-computing-power smart modules are gradually becoming a key component for
customers to enhance the intelligence premium and operational efficiency of their
products. This value realization model has driven customers to shift from a
“cost-oriented” to a “capability-oriented” approach in module selection.
¾ “Modularization of computing power” has driven the evolution of modules into
smart units: To address the demands for the rapid evolution of AI algorithms and the
accelerated iteration of end products, the industry will accelerate the shift towards a
“modularization of computing power” architecture centered on smart modules, and
provides device with independent and replaceable smart computing units through
high-computing-power modules, so as to enhance system flexibility and maintenance
efficiency. This model has been rapidly applied in scenarios with high local intelligence
requirements, such as robots, driving modules towards standardization and upgradability.
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4 MARKET COMPETITION ANALYSIS
4.1 Summary of the Global Wireless Communication Module Competitive Landscape
¾ The global wireless communication module industry is relatively concentrated in terms
of market share. Although leading enterprises dominate in terms of scale and revenue,
the diversity of enterprises at various levels ensures continuous technological progress
and a vibrant competitive environment. In 2024, the competitive landscape in global
wireless communication module market was relatively concentrated, with the five largest
manufacturers accounting for 76.8% of the market share in total.
4.2 Ranking in Global Wireless Communication Module Market
¾ The wireless communication module industry has high requirements for modular design,
software-hardware collaborative development, and large-scale manufacturing
capabilities, resulting in a high degree of market concentration. In terms of 2024 global
revenue of wireless communication module business, our Company ranks fourth,
accounting for 6.4% of the global market share. The following table sets forth the 2024
global ranking of wireless communication module providers by revenue from wireless
communication module:
Ranking Company Revenue
(RMB Billion)
1
2
3
4
5
Company A
Company B
Company C
The Company
Company D
Others
Total
18.6
7.0
3.0
2.8
2.1
10.1
43.6
42.7%
16.1%
6.9%
6.4%
4.8%
23.1%
100%
Ranking in Global Wireless Module Market, by Revenue from Wireless Communication Module Business, 2024
Market Share (%)
Source: Frost & Sullivan
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4.3 Ranking in Global 5G In-vehicle Module Market
¾ ICV have emerged as one of the representative scenarios driving the accelerated
adoption of 5G application. The high-bandwidth, low latency and high-reliability
communication capabilities of 5G in-vehicle modules provide critical support for
terminal side intelligence processing at the vehicle terminal side widely used in
intelligent cockpits and intelligent connectivity, it serves as a critical communication
component for smart vehicles to achieve information interconnection and edge
intelligence. Due to the high requirements for functional integration, reliability
certification, and scenario adaptation capabilities, coupled with the long-term deep
cooperation cycles with vehicle OEMs and leading customers, this market segment
exhibits high concentration. In terms of 2024 global revenue of 5G in-vehicle modules,
our Company ranks first, accounting for 35.9% of the global market share. The
following table sets forth the 2024 global ranking of 5G in-vehicle module providers by
revenue:
Ranking Company Revenue
(RMB Million)
Ranking in Global 5G In-vehicle Module Market, by Revenue, 2024
Market Share (%)
3
1
2
Company B
The Company
Company A
Others
Total
587.6
991.3
825.0
357.1
2,761.0
21.3%
35.9%
29.9%
12.9%
100%
Source: Frost & Sullivan
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4.4 Ranking in Global High-computing-power Smart Module Market
¾ High-computing-power smart modules, as a key carrier for the deployment of AI at the
edge, are emerging as the core bridge connecting computing-power, algorithms, and
industrial applications, characterized by both advanced technological sophistication and
high commercial value. High-computing-power smart module have stringent
requirements for heterogeneous computing architecture design, software-hardware
collaborative optimization, and system-level integration capabilities. They also require
deep adaptation and algorithm co-debugging for diverse industry scenarios, resulting in
high entry barriers and complex product delivery. As a result, this market segment
exhibits strong technical barriers and high concentration. In terms of revenue from
high-computing-power smart module business, our Company ranks first, accounting for
29.0% of the global market share. The following table sets forth the 2024 global ranking
of high-computing-power smart module providers in terms of revenue from
high-computing-power smart module business:
Ranking Company Revenue
	RMB100 Million)
Ranking in Global High-computing-power Smart Module,
by Revenue from High-computing-power Smart Module Business, 2024
Market Share (%)
1
2
3
The Company
Company A
Company B
Others
Total
10.2
6.2
5.6
13.1
35.1
29.0%
17.7%
16.0%
37.3%
100%
Source: Frost & Sullivan
4.5 Ranking in Global Data Transmission Module Market
In terms of revenue from the data transmission module business, our Company ranks fifth
globally, with revenue of RMB960 million, accounting for 2.8% of the global market share. The
following table sets forth the 2024 global ranking of data transmission module providers in terms
of revenue from the data transmission module business.
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Ranking Company Revenue
(RMB100 Million) Market Share (%)
1 Company A 165.0 47.7%
2 Company B 30.5 8.8%
3 Company C 19.5 5.6%
4 Company D 15.0 4.3%
5 The Company 9.6 2.8%
Others 106.4 30.8%
Total 346.0 100.0%
RRRRevenue
Ranking in Global Wireless Module Market,
by Revenue from Data Transmission Module Business, 2024
4.6 Ranking in Global Regular Smart Module Market
In terms of revenue from the regular smart module business, our Company ranks third
globally, with revenue of RMB830 million, accounting for 15.1% of the global market share. The
following table sets forth the 2024 global ranking of regular smart module providers in terms of
revenue from the regular smart module business.
Ranking Company Revenue
(RMB100 Million) Market Share (%)
11 Company B 30.9 56.2%
22 Company A 9.8 17.8%
33 The Company 8.3 15.1%
Others 6.0 10.9%
Total 55.0 100.0%
RRRR
e
v
e
nue
Ranking in Global Wireless Module Market,
by Revenue from Regular Smart Module Business, 2024
Notes:
(1) Company A is a listed company, founded in 2010 and headquartered in Shanghai, China. It is a global supplier of
cellular and GNSS modules, specializing in providing high-performance, high-quality wireless communication
modules for various industries.
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(2) Company B is a listed company, founded in 1999 and headquartered in Shenzhen, China. It is a specialized
provider of IoT communication solutions and wireless communication modules, delivering modules and solutions
across multiple sectors, including connected vehicle intelligent security, smart cities, and smart homes.
(3) Company C is a private company, founded in 2005 and headquartered in Beijing, China. It operates in the
telecommunications sector, focusing on the development and provision of communication technologies and
solutions.
(4) Company D is a listed company, founded in 1997 and headquartered in Beijing, China. It is one of the world’s
largest mobile network operator, providing mobile voice and multimedia services through its nationwide mobile
telecommunications network across China.
4.5 Market Entry Barriers
¾ Customer/Solution Barrier: High-computing-power smart module are often deeply
embedded in the whole machine systems of downstream customers and are highly
integrated with operating systems, application layers, peripheral components. In the
initial development stage, multiple processes such as communication protocol
adaptation, software-hardware joint debugging, and scenario-based deployment is
required to be completed. Once a cooperation is established, subsequent updates and
iterations are mostly carried out on the original platform. The replacement cost is high,
resulting in strong customer stickiness. Therefore, module manufacturers with the ability
of software-hardware collaborative development and a rapid customized response
mechanism are more likely to provide customized services to downstream customers and
establish stable cooperative relationships in different scenarios, thus having a greater
advantage in continuously acquiring customers.
¾ Technical Barrier: High-computing-power smart module involves complex technical
systems such as SoC platform development, heterogeneous computing scheduling,
in-depth customization of Android/Linux, AI engine integration, and power consumption
control, which is required to have the ability of hardware structure design, system-level
optimization, and AI algorithm adaptation simultaneously. Technical capabilities are not
limited to hardware but are reflected in the ability to provide overall solutions across
chip platforms, operating systems, and industry requirements.
¾ Capital Barrier: The research and development of smart module, especially
high-computing-power products, highly depends on long-term and stable capital
investment. It covers multiple high-cost aspects such as chip platform connection,
human resource allocation, sample iteration, compatibility testing, and certification
adaptation. In particular, the realization of edge AI capabilities requires continuous
investment in software toolchains, development platforms, and scenario-based algorithm
development, resulting in a significant R&D capital-intensive nature.
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APPLICABLE LA WS AND REGULATIONS TO OUR BUSINESS IN THE PRC
Regulations on Telecommunications Equipment Network Access
According to Measures for the Administration of Telecommunications Equipment Access to
the Network (), which was lasted amended by Ministry of Industry and
Information Technology (the “ MIIT”) on January 18, 2024, the State applies a network access
licensing system to telecommunications terminal equipment, radio communication equipment and
telecommunications equipment involving interconnection of public telecommunications networks.
The telecommunications equipment subject to the network access license system must obtain the
network access license issued by the MIIT. Equipment without access to the network license is
prohibited from accessing the public telecommunications network for use and being sold within the
country.
Regulations on Radio Transmitting Equipment
According to the Radio Regulations of the PRC ( ʕശɛ͏΍ձ਷ೌᇞཥ၍ଣૢԷ), which
was issued by the State Council and the Central Military Commission on September 11, 1993,
revised on November 11, 2016, and came into effect on December 1, 2016, the national radio
regulatory authority shall be responsible for radio regulation nationwide, and the production or
import of radio transmitting equipment for domestic sale and use shall be in compliance with the
laws and regulations on product quality, national standards and the provisions of the state on radio
regulations. Except for micro power short-distance radio transmitting equipment, any production or
import of other radio transmitting equipment for domestic sale and use requires an application for
model confirmation to be filed with the national radio regulatory authority. For anyone who, in
violation of the provisions hereof, produces or imports any radio transmitting equipment sold or
used within China without obtaining model confirmation, the radio regulatory authority shall order
the violator to take corrective action, and impose a fine ranging from RMB50,000 to RMB200,000
on the violator. If the violator refuses to take corrective action, the radio transmitting equipment
without model confirmation shall be confiscated, and a fine ranging from RMB200,000 to RMB1
million shall be imposed. For anyone who sells any radio transmitting equipment for which model
confirmation should have been obtained in accordance with the provision of Article 44 thereof, the
radio regulatory authority shall order the violator to take corrective action, confiscate illegally sold
radio transmitting equipment and illegal income, and may impose a fine of not more than 10% of
the goods value of illegally sold equipment. If the violator refuses to take corrective action, a fine
of not less than 10% but not more than 30% of the value of the illegally sold equipment shall be
imposed.
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According to the Telecommunications Regulations of the PRC (ૢԷ)
issued by the State Council on September 25, 2000, revised on February 6, 2016, and effective on
the same day, the State shall implement a network connection licensing system for
telecommunications terminal equipment, radio telecommunications equipment, and
interconnection-related equipment. Telecommunications terminal equipment, radio
telecommunications equipment, and interconnection-related equipment accessing a public
telecommunications network shall comply with the standards stipulated by the State and obtain a
network connection permit. Telecommunications equipment manufacturing enterprises shall
guarantee the quality and reliability of telecommunications equipment which has obtained a
network connection permit and shall not lower product quality or performance. Selling
telecommunications terminal equipment which does not carry a network connection permit shall be
ordered by the telecommunications administration authorities of the province, autonomous region
or centrally administered municipality to make corrections and be imposed a fine ranging from
RMB10,000 to RMB100,000. Any offender who violates the provisions of these Regulations in the
lowering of product quality or performance after obtaining the telecommunications equipment
network connection permit, shall be punished by the product quality supervision authorities
pursuant to the provisions of the relevant laws and administrative regulations.
The MIIT and other competent authorities promulgate relevant national and industry
standards as recommended guidelines to govern the industry of wireless communication modules
and solutions from time to time. For example, on March 29, 2024, the MIIT issued the Technical
Requirements for 5G Superior Universal Modules (Phase II) 5GӋ ()
(YD/T 4664-2024), which came into effect on July 1, 2024. This national standard establishes a
comprehensive technical framework for 5G universal communication modules, defining their
logical structure, multi-mode and multi-band requirements, network access capabilities,
communication performance, and classification criteria, and it further details their basic functional
requirements, hardware technical requirements, electrical interface technical requirements,
software technical requirements, and performance requirements. In addition, on September 30,
2022, the MIIT issued the Technical Requirements and Testing Methods of 5G Superior Universal
Module Reliability for Industry Terminals (ٙ5GӋʿ಻༊
) (YD/T 4110-2022), which came into effect on January 1, 2023. This standard represents a
specialized industry standard offering guidance on reliability requirements for industrial
applications. It specifies rigorous environmental testing methodologies covering temperature and
humidity resistance, dust and fog protection, and mechanical and electrical durability. These
provisions are designed to validate module performance under extreme operating conditions and
prolonged usage, thereby supporting robust deployment of 5G modules across consumer, industrial,
and automotive sectors where reliability is paramount.
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Regulations on IoV and Intelligent Connected Vehicles Industry
According to the Guidelines for the Construction of National Standards System for Internet of
Vehicles Industry (Electronic Products and Services) (یܸ( ཥɿପ
ਕ)) issued by the MIIT and the Standardization Administration of the PRC on June 8,
2018, it mainly aims at standardizing automotive electronic products, in-vehicle information
systems, and in-vehicle information services and platforms that underpin the Internet of Vehicles
(the “ IoV”) industry chain, and clarifies the development direction of standardization of IoV
electronic products and in-vehicle information services.
In order to implement the National Standardization Development Outline (࢝
), promote the high-quality development of the intelligent connected vehicle industry, and
accelerate the construction of an automobile power, the MIIT has revised and improved the
Guidelines for the Construction of National Standards System for Internet of Vehicles Industry
(Intelligent Connected Vehicles) (یܸ( ౽ঐၣᑌӛԓ )) based on
the development of the intelligent connected vehicle technology industry, further formed the
Guidelines for the Construction of National Standards System for Internet of Vehicles Industry
(Intelligent Connected Vehicles) (2023 Edition) (یܸ( ౽ঐၣᑌӛ
ԓ)(2023و)), which provided that the government will establish a standard system for
intelligent connected vehicles that adapts to China’s national conditions and is in line with
international standards in stages based on the current status of intelligent connected vehicle
technology, industry needs, and future development trends.
According to the Interim Provisions on Radio Management of Automobile Radar ( ӛԓཤ༺
) promulgated by the MIIT on November 16, 2021 and became effective
from March 1, 2022, the automobile radar equipment manufactured or imported for domestic sale
or use shall comply with the RF Technical Requirements for Automobile Radar and apply for the
radio type approval of the radio transmitting equipment from the national radio administration
agency.
The Guidelines for the Construction of National Standards System for Internet of Vehicles
Industry (Intelligent and Connected Vehicles) (2023 Edition) (ܸ
ی(౽ঐၣᑌӛԓ )(2023وwere jointly revised and issued by the MIIT and the Standardization
Administration of the PRC. The guideline primarily focuses on the universal norms, core
technologies, and key product applications of intelligent and connected vehicles, aiming to
establish a comprehensive standard system that encompasses the basics, technologies, products,
and testing standards for intelligent and connected vehicles. The guideline will direct the National
Automotive Standardization Technical Committee’s Intelligent and Connected Vehicle
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Subcommittee and relevant organizations to intensify their efforts in developing standards in key
areas such as functional safety, cybersecurity, operating systems, and promote the dissemination
and implementation of critical standards.
The “On-board Wireless Communication Terminal” ( ԓ༱ೌᇞஷৃ୞၌)
(GB/T43187-2023) is a national recommended standard that stipulates the technical requirements
for on-board wireless communication terminals. It also outlines the testing methods and inspection
rules for these terminals, providing detailed specifications for various aspects such as
communication performance, electromagnetic compatibility (EMC), environmental adaptability,
and durability.
Additionally, on August 23, 2024, the state also released national recommended standards
such as “Terminology and Definitions for Intelligent and Connected Vehicles” ( ౽ᅆၣᑌӛԓஔ
່) (GB/T 44373-2024) with the aim of defining the terminology and definitions related to
the basic fundamentals, key technologies, system components, and functional applications of
intelligent and connected vehicles.
Regulations Relating to Corporation and Foreign Investment
The establishment, operation and management of corporate entities in the PRC is governed by
the Company Law of the PRC (), which was promulgated by the
Standing Committee of the National People’s Congress of the PRC (the “ SCNPC ”) on December
29, 1993 and came into effect on July 1, 1994, and was last amended on December 29, 2023 and
became effect on July 1, 2024. The Company Law of the PRC generally governs two types of
companies, namely limited liability companies and joint stock limited companies. Both types of
companies have the status of legal persons, and the liability of shareholders of a limited liability
company or a joint stock limited company is limited to the amount of registered capital they have
contributed. The Company Law of the PRC shall also apply to foreign invested companies in form
of limited liability company or joint stock limited company. Where laws on foreign investment
have other stipulations, such stipulations shall prevail.
On January 1, 2020, the Foreign Investment Law of the PRC ( ʕശɛ͏΍ձ਷̮ਠҳ༟
) (the “ FIL”) and the Regulations on the Implementation of the Foreign Investment Law of the
PRC (ૢԷ ) became effective and simultaneously replaced the
trio of prior laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint
Venture Enterprise Law of the PRC ( ), the Sino-foreign
Cooperative Joint Venture Enterprise Law of the PRC ( )
and the Wholly Foreign-invested Enterprise Law of the PRC (),
together with their implementation rules and ancillary regulations. The FIL defines foreign
investment and establishes the framework for promotion, protection and administration of foreign
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investment activities. On December 30, 2019, the Ministry of Commerce of the PRC (the
“MOFCOM ”) and the State Administration for Market Regulation (the “ SAMR”) jointly
promulgated the Measures for Reporting of Information on Foreign Investment (జ
), which came into effect on January 1, 2020 and pursuant to which, foreign investors
shall submit an initial or change report through the Enterprise Registration System when
establishing foreign-invested enterprises or acquiring equity in non-foreign-invested enterprises
and for any subsequent changes.
Pursuant to the FIL, China has adopted a system of national treatment which includes a
negative list with respect to foreign investment administration. The negative list will be issued by,
amended or released upon approval by the State Council, from time to time. The negative list will
set forth industries in which foreign investments are prohibited and industries in which foreign
investments are restricted. Foreign investment in prohibited industries is not allowed, while foreign
investment in restricted industries must satisfy certain conditions stipulated in the negative list.
Foreign investments and domestic investments in industries outside the scope of the prohibited
industries and restricted industries stipulated in the negative list will be treated equally. The
Special Administrative Measures (Negative List) for the Access of Foreign Investment (2024
Version) (݄( ૶ఊ)(2024و))(the “ Negative List ”), which were
promulgated by the National Development and Reform Commission (the “ NDRC”) and the
MOFCOM on September 6, 2024 and became effective on November 1, 2024 and the Catalog of
Industries for Encouraging Foreign Investment (2025 Version) ( ོᎸ̮ਠҳ༟ପุͦ፽ (2025 ϋ
و)) (the “ Encouraging Catalog ”), which was promulgated by the NDRC and the MOFCOM on
December 15, 2025 and became effective on February 1, 2026, listed the categories of encouraged,
restricted, and prohibited industries. Any industry not included in the Negative List shall be
administered under the principle of equal treatment to domestic and foreign investment. As of the
Latest Practicable Date, our business operations do not fall within the scope of the Negative List
and are therefore not subject to any special administrative measures thereunder.
Regulations Relating to Customs Declaration
The Customs Law of the PRC () was promulgated by the SCNPC
on January 22, 1987 and effective from July 1, 1987, and last amended on April 29, 2021, and
stipulates that the customs of the PRC is a governmental organization responsible for supervision
and control over all arrivals in and departures from the customs territory. All the transports, goods
and articles shall enter into or exit from the territory of the PRC at a place where a customs office
is established. The customs declaration and duty payment formalities may be undergone by the
consignees or consignors of imported and exported goods, or by the customs clearing enterprises
entrusted by such consignees or consignors. The consignees or consignors of imported and
exported goods and the customs clearing enterprises shall file records with the customs when
undergoing customs declaration formalities, otherwise may be imposed fines by the customs.
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According to the Administrative Provisions of the Customs of the PRC on Record-Filing of
Customs Declaration Entities ( ) issued by the
General Administration of Customs of the PRC (the “ GACC”) on November 19, 2021 and
effective from January 1, 2022, the consignees or consignors of imported and exported goods and
the customs clearing enterprise that apply for the filing of records with the customs shall obtain
the status of a market entity; where the consignees or consignors of imported and exported goods
apply for the filing of records with the customs, the filing of foreign trade dealers shall also be
completed.
According to the Announcement on Fully Including the Filing of Customs Declaration
Entities in the Reform of “Integrating Multiple Certificates into One” (ॶ
ɝ“εᗇΥɓ”ʮѓ) jointly issued by the GACC and the SAMR on December 20, 2021
and effective from January 1, 2022, where an applicant intends to be filed as a customs declaration
entity when undergoing the registration formalities as a market entity with the market regulation
authorities, it shall tick the box of filing as a customs declaration entity as required and fill in the
relevant information for filing. The market regulation authorities will then complete the
registration pursuant to procedures of “Integrating Multiple Certificates into One” and share the
relevant information with the GACC on the SAMR level. Such applicants are no longer required to
submit applications for filing as a customs declaration entity to the customs. In addition, the
Decision of the SCNPC on revising the Foreign Trade Law of the PRC (ɽึ੬ਕ։
֛issued by the SCNPC on December 30, 2022
deleted the requirements on the foreign trade dealers engaged in the import and export of goods or
technologies to be registered with the competent administrative departments of foreign trade of the
State Council or any institutions authorized thereby, namely the filing of foreign trade dealers.
Pursuant to the Regulations on the Administration of Import and Export of Goods of the PRC
(ආ̈ɹ၍ଣૢԷ ) promulgated by the State Council on December 10,
2001 and last amended on March 10, 2024, which came into effect on May 1, 2024, enterprises
engaged in the trade activities of importing goods into the territory of the PRC or exporting goods
outside of the PRC must comply with the Regulations on the Administration of Import and Export
of Goods. Goods whose import or export is prohibited shall not be imported or exported; goods
whose import or export is restricted shall be subject to a licensing or quota system; and goods
whose import or export is free shall not be subject to restriction. The consignee of imported goods
or the consignor of exported goods shall submit an automatic import and export license, an import
and export license or a quota certificate to the customs for customs clearance.
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Regulations on Production Safety
Pursuant to the Production Safety Law of the PRC (), or the
Production Safety Law, promulgated by the SCNPC on June 29, 2002 and implemented on
November 1, 2002, and last revised on June 10, 2021, entities engaged in production and business
activities in Chinese mainland shall comply with the Production Safety Law and other laws and
regulations related to production safety. Entities shall strengthen the management, establish and
improve responsibility systems and polices, improve conditions, strengthen the standardized and
information technology development of work safety and improve the production level to ensure
their production safety. The primary persons in charge of the production and operation entities are
fully responsible for the production safety of their entities. Violation of the Production Safety Law
may result in imposition of fines and penalties, suspension of operation, an order to cease
operation, or even criminal liability in severe cases.
Regulations on Product Quality
Pursuant to the Product Quality Law of the PRC () enacted by
the SCNPC on February 22, 1993, and most recently amended and implemented on December 29,
2018, producers shall be responsible for the quality of their products. The product quality shall
meet the following requirements: (i) no unreasonable dangers endangering the safety of persons
and property; where there are national or industry standards ensuring the health and safety of
persons and property, such standards must be complied with; (ii) the product shall possess the
properties it is supposed to possess, except where the product’s flaws in their properties are
explicitly stated; and (iii) the product shall comply with the product standards stated on the
product or its packaging, and meet the quality conditions as represented in product descriptions,
physical samples, etc.
Regulations on Compulsory Product Certification
According to the Administrative Regulations on Compulsory Product Certification (׌
) as promulgated by the General Administration of Quality Supervision,
Inspection and Quarantine of the PRC (the “ QSIQ”), which has been merged into the SAMR
afterwards, on July 3, 2009 and became effective on September 1, 2009 and was recently amended
on September 29, 2022 and became effective on November 1, 2022 and the List of the First Batch
of Products Subject to Compulsory Product Certification (ͦ
፽) as promulgated by the QSIQ in association with the State Certification and Accreditation
Administration Committee, on December 3, 2001, the SAMR is responsible for the regulation and
quality certification. Telecommunication terminal equipment and information technology
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equipment must not be sold, exported or used in operating activities unless they are certified by
certification authorities designated by the State Certification and Accreditation Administration
Committee as qualified products and granted certification marks.
Regulations on Real Estate
The Civil Code of the PRC (Պ) was promulgated by the National
People’s Congress on May 28, 2020, and implemented on January 1, 2021. According to the Civil
Code, the establishment, modification, assignment and extinguishment of real estate property rights
are effective upon registration in accordance with the law; unless the law stipulates otherwise,
such establishment, modification, assignment and extinguishment shall be ineffective without
registration. Real estate registration shall be handled by the registration authority at the location of
the property.
The Interim Regulations on Real Estate Registration ( ʔਗପ೮াᅲБૢԷ) promulgated
by the State Council on November 24, 2014, taking effect on March 1, 2015 and amended on
March 24, 2019 and March 10, 2024, and the Implementing Rules of the Interim Regulations on
Real Estate Registration ( ) promulgated by the Ministry of Land
and Resources on January 1, 2016 and amended on July 24, 2019 and May 9, 2024, provide that,
among other things, the State implements a uniform real estate registration system and real estate
registration shall follow the principles of strict administration, stability, continuity, and
convenience for the public.
Regulations on the Management of Lease Housing
Pursuant to (i) the Law on Administration of Urban Real Estate of the PRC ( ʕശɛ͏΍ձ
), promulgated by the SCNPC on July 5, 1994 and latest amended on
August 26, 2019 and took effect on January 1, 2020, and (ii) the Administrative Measures on
Leasing of Commodity Housing (), promulgated by the Ministry of
Housing and Urban-Rural Development on December 1, 2010 and came into effect on February 1,
2011, when leasing premises, the lessor and lessee are required to enter into a written lease
contract, containing such provisions as the leasing term, use of the premises, rental and repair
liabilities, and other rights and obligations of both parties. Both the lessor and the lessee shall
complete property leasing registration and filing formalities within 30 days from the execution of
the property lease contract with the real estate administration department where the leased property
is located. Failure to comply with the registration and filing procedures may result in fines for
both the lessor and the lessee.
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PRC Laws and Regulations on Intellectual Property Rights
Patent
The Patent Law of the PRC () was enacted by the SCNPC on
March 12, 1984, implemented on April 1, 1985, and most recently revised on October 17, 2020,
with implementation from June 1, 2021. The Detailed Rules for the Implementation of the Patent
Law of the PRC () were issued by the State Council on June
15, 2001, implemented on July 1, 2001, and most recently revised on December 11, 2023, with
implementation from January 20, 2024. According to these laws, regulations and detailed rules,
patents in China are categorized into three types: invention patents, utility model patents and
design patents. The term of an invention patent right is 20 years, the term of a utility model patent
is 10 years, and the term of a design patent is 15 years, all of which are calculated from the filing
date. Any entity or individual that exploits another’s patent must conclude a licensing agreement
with the patent holder and pay royalties. Exploiting a patent without the permission of the patent
holder constitutes an infringement of their patent rights.
Trademark
The Trademark Law of the PRC () was promulgated by the SCNPC
on August 23, 1982, implemented on March 1, 1983, and most recently revised on April 23, 2019,
with implementation from November 1, 2019. The Regulations for the Implementation of the
Trademark Law of the PRC (ૢԷ) were issued by the State
Council on August 3, 2002, implemented on September 15, 2002, and most recently revised on
April 29, 2014, with implementation from May 1, 2014. According to these laws and regulations,
the validity period of a registered trademark is 10 years from the date of approval. To continue
using a trademark upon the expiry of its validity, renewal procedures must be completed in
accordance with the provisions within the 12 months preceding expiration. If renewal procedures
are not completed within this period, a six-month extension is allowed. Each renewal extends the
validity period for 10 years, starting from the day following the expiration of the last validity
period. Trademark registrants may authorize others to use their registered trademarks by signing
trademark licensing agreements.
Layout-Designs of Integrated Circuits
The Regulations on the Protection of Layout-Designs of Integrated Circuits ( ණϓཥ༩бྡ
ᚐૢԷ) were issued by the State Council on April 2, 2001, and implemented on October
1, 2001. According to these regulations, natural persons, legal persons or other organizations in
China who create layout-designs have exclusive rights to their designs. Foreign persons whose
layout-designs are first commercially exploited within the territory of China are also entitled to
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exclusive rights to their designs. The protection term for the exclusive right of a layout-design is
10 years, calculated from the date of the design registration application or the first date of
commercial use anywhere in the world, whichever is earlier. However, a layout-design is no longer
protected under these regulations 15 years after its creation, regardless of registration or
commercial use.
Domain Name
The Administrative Measures for the Internet Domain Name () were
issued by the MIIT on August 24, 2017, and implemented on November 1, 2017. According to
these management measures, the MIIT is the primary regulatory authority for the management of
Internet domain names in China. Domain name registration is processed through domain name root
servers and their operating institutions, domain name registration management institutions and
domain name registration service institutions established in accordance with the relevant
regulations.
Computers Software Copyright
The Measures for the Registration of Computer Software Copyright (ၑዚழ΁ഹЪᛆ೮
), which was promulgated by the National Copyright Administration on February 20,
2002, and came into effect on the same day, regulates the registration of software copyright, the
exclusive licensing contract and assignment contracts of software copyright. The National
Copyright Administration is mainly responsible for the registration and management of national
software copyright and designates the China Copyright Protection Center as the agency for
software registration. The China Copyright Protection Center will grant certificates of registration
to computer software copyright applicants.
Regulations on Employment and Social Welfare
Employment
The major PRC laws and regulations that govern employment relationship are the PRC Labor
Law (), the PRC Labor Contract Law ()
(the “ Labor Contract Law ”) and its implementation, which impose stringent requirements on the
employers in relation to entering into fixed-term employment contracts, hiring of part-time
employees and dismissal of employees.
The Labor Law of the PRC () was promulgated by the SCNPC on
July 5, 1994, implemented on January 1, 1995, and most recently revised and implemented on
December 29, 2018. The Labor Law of the PRC stipulates matters related to promoting
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employment, labor contracts, working hours, rest and leave, wages, labor safety and hygiene,
special protection for female and minor workers, vocational training, social insurance and welfare,
labor disputes, supervision and inspection, as well as legal liabilities.
The Labor Contract Law of the PRC () was issued by the
SCNPC on June 29, 2007, implemented on January 1, 2008, and most recently revised on
December 28, 2012, with the revision taking effect on July 1, 2013. The Implementation
Regulation of the Labor Contract Law of the PRC (ૢԷ ) were
issued and implemented by the State Council on September 18, 2008. According to the
aforementioned law and regulation, a written labor contract shall be established when forming a
labor relationship. Employers shall not force employees to work overtime and must pay overtime
wages according to national regulations if overtime is arranged. Wages must not be lower than the
local minimum wage standard and must be paid to employees promptly.
Social Insurance
The PRC Social Insurance Law () (the “ Social Insurance
Law”) issued by the SCNPC in 2010 and latest amended on December 29, 2018, has established
social insurance systems of basic pension insurance, basic medical insurance, work-related injury
insurance, unemployment insurance and maternity insurance and has elaborated in detail the legal
obligations and liabilities of employers who fail to comply with relevant laws and regulations on
social insurance. According to the Social Insurance Law and the Provisional Regulations on
Collection and Payment of Social Insurance Premiums (ᎈ൬ᅄᖮᅲБૢԷ) promulgated
by the State Council on January 22, 1999 and most recently amended on March 24, 2019 and
effective from the same date, enterprises shall register social insurance with local social insurance
and pay or withhold relevant social insurance for or on behalf of its employees. Any employer that
fails to make social insurance contributions may be ordered to rectify the non-compliance and pay
the required contributions within a prescribed time limit and be subject to a late fee. If the
employer still fails to rectify the failure to make the relevant contributions within the prescribed
time, it may be subject to a fine ranging from one to three times the amount overdue.
According to the Interpretation II by the Supreme People’s Court of the PRC on Legal Issues
in the Trial of Labor Dispute Cases (༆
ᙑ(ɚ)), promulgated by the Supreme People’s Court on August 1, 2025 and effective from
September 1, 2025, any agreement between a PRC employer and an employee or an employee’s
undertaking to the employer on the non-contribution of social insurance shall be deemed invalid by
the people’s court. If an employee requests to terminate the employment agreement and seek
economic compensation on the grounds that the employer has failed to pay social insurance
contributions in accordance with the applicable laws, the people’s court shall support such claims.
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Housing Provident Fund
Pursuant to the Regulations on Administration of Housing Provident Fund (၍ଣ
ૢԷ), which was promulgated on April 3, 1999 and last revised on March 24, 2019, employers
in Chinese mainland shall provide their employees with housing provident fund. Employers who
fail to contribute to the above housing provident funds may be ordered to make full payment
within a prescribed time period by the housing provident fund management center. If an employer
fails to make the payment towards the housing provident funds within a prescribed time limit, an
application may be made to a people’s court for enforcement.
Regulations Relating to Overseas Investment
According to the Measures for the Administration of Overseas Investment of Enterprises ( Ά
) promulgated by the NDRC on December 26, 2017 and implemented on
March 1, 2018, investors engaging in overseas investment are required to complete formalities for
the confirmation or recordation, among others, of an overseas investment project, report the
relevant information, and cooperate in supervisory inspection.
Pursuant to the Measures for the Administration of Overseas Investment ( ྤ̮ҳ༟၍ଣ፬
) promulgated by the MOFCOM on March 16, 2009, lastly amended on September 6, 2014 and
implemented on October 6, 2014, “overseas investment” means the acts of an enterprise legally
formed in China to own a non-financial enterprise or obtain the ownership, control, or right of
business management of or any other interest in an existing non-financial enterprise outside of
China by formation, acquisition or merger, or other means. The MOFCOM and the provincial
counterparts promulgate regulations providing that overseas investment of enterprises to be subject
to recordation or confirmation management, depending on the actual circumstances of investment.
Overseas investment involving any sensitive country or region or any sensitive industry shall be
subject to confirmation management. Overseas investment under other circumstances shall be
subject to recordation management. When an overseas enterprise invested by an enterprise
conducts overseas reinvestment, the enterprise shall report to the commerce departments after
completing the overseas legal procedures.
Pursuant to the Provisions on the Foreign Exchange Administration of the Overseas Direct
Investment of Domestic Institutions ( ) promulgated by the
State Administration of Foreign Exchange (the “ SAFE”) on July 13, 2009 and implemented on
August 1, 2009 and the Notice on Further Simplifying and Improving Policies for the Foreign
Exchange Administration of Direct Investment (ٙ
) promulgated by the SAFE on February 13, 2015, implemented on June 1, 2015 and was
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partially repealed on December 30, 2019, stipulates that, upon obtaining the approval for overseas
investment, the overseas direct investment of PRC enterprises shall apply for foreign exchange
registration to the banks at their places of registration.
Regulations on Foreign Exchange
Pursuant to the Foreign Exchange Administrative Regulations of the PRC ( ʕശɛ͏΍ձ਷
̮ි၍ଣૢԷ) promulgated by the State Council on January 29, 1996, effective on April 1, 1996
and last amended on August 5, 2008, and the Administrative Regulations on Foreign Exchange
Settlement, Sales and Payment () promulgated by the People’s Bank
of China on June 20, 1996 and effective on July 1, 1996, Renminbi is freely convertible for
payments of current account items such as trade and service-related foreign exchange transactions
and dividend payments after the relevant financial institutions have reasonably examined the
authenticity of the transactions documents and their consistency with foreign exchange receipts
and payments, but are not freely convertible for capital expenditure items such as direct
investment, loans or investments in securities outside the PRC unless the approval of the SAFE or
its local counterparts is obtained in advance.
According to the Notice of the State Administration of Foreign Exchange on Issues
concerning the Foreign Exchange Administration of Overseas Listing (ྤ̮ɪ̹̮ි၍ଣϞ
 the “ SAFE Circular 54 ”) promulgated by the SAFE on December 26, 2014, a
domestic company shall, within 15 working days after the completion of its overseas listing, go
through the registration of overseas listing with the foreign exchange bureau at its place of
registration. A domestic issuer may transfer the capital raised through overseas listing to its local
bank account or deposit at its overseas account. The use of capital shall be consistent with the
purposes disclosed in this document or other public documents. On December 24, 2025, the
People’s Bank of China and the SAFE promulgated the Notice of the People’s Bank of China and
the State Administration of Foreign Exchange on Issues Concerning the Administration of Funds of
Domestic Enterprises Listed Overseas (ྤʫΆุྤ̮ɪ̹༟
ٝt h e“ Notice ”), which will supersede the SAFE Circular 54 once it takes
into effect on April 1, 2026. Under the Notice, domestic enterprises listed overseas shall apply for
overseas listing registration within 30 working days from the first trading day of their overseas
listing or upon the completion of the overallotment.
According to the Circular of the State Administration of Foreign Exchange on Reforming and
Regulating Policies for the Administration over Foreign Exchange Settlement of Capital Accounts
( ) announced by SAFE and
effective on June 9, 2016, and the Notice of the State Administration of Foreign Exchange on
Further Deepening Reform to Promote Cross-border Trade and Investment Facilitation (̮ි
 ) announced and effective on
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December 4, 2023, the foreign exchange receipts under capital accounts of domestic institutions
are subject to discretionary settlement policies. The foreign exchange receipts under capital
accounts (including foreign exchange capital, foreign debts, and repatriated funds raised through
overseas listing) subject to discretionary settlement as expressly prescribed in the relevant policies
may be settled with banks according to the actual need of the domestic institutions for business
operation. Domestic institutions may, at their discretion, settle up to 100% of foreign exchange
receipts under capital accounts for the time being. SAFE may adjust the above proportion in due
time according to the balance of payments. While eligible for the discretionary settlement of
foreign exchange receipts under capital accounts, domestic institutions may also opt to use their
foreign exchange receipts according to the payment-based settlement system. A bank shall, in
handling each transaction of foreign exchange settlement for a domestic institution according to
the principle of payment-based settlement, review the authenticity and compliance of the use of the
funds settled in the previous foreign exchange settlement (including discretionary settlement and
payment-based settlement) of such domestic institution. Domestic institutions’ foreign exchange
receipts under the capital account and the Renminbi funds obtained from the settlement thereof
shall not, directly or indirectly, be used for expenditure beyond the enterprise’s business scope or
expenditure prohibited by laws and regulations of the state. Unless otherwise specified, the funds
shall not, directly or indirectly, be used for investments in securities or other investments or wealth
management other than banks’ principal-secured products. The funds shall not be used for the
granting of loans to non-affiliated enterprises, except where it is expressly permitted in the
business scope. The funds shall not be used for the construction or purchase of real estate for
purposes other than self-use (except for real estate enterprises).
According to the Circular on Optimizing Administration of Foreign Exchange to Support the
Development of Foreign-related Business by the State Administration of Foreign Exchange (࢕
 ) issued by SAFE on April 10, 2020,
eligible enterprises are allowed to make domestic payments by using receipts under capital
accounts, such as their capital funds, foreign credits and the income from overseas listing, with no
need to provide the evidentiary materials concerning authenticity on a transaction-by-transaction
basis to banks in advance, provided that their capital use shall be authentic and in line with
provisions, and conform to the prevailing administrative regulations on the use of receipts under
capital accounts. Local foreign exchange authorities shall strengthen monitoring analysis and
interim and post regulation.
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Regulations on Taxation
Enterprise Income Tax
According to the Enterprise Income Tax Law of the PRC ()
(the “ EIT Law ”) which was promulgated on March 16, 2007 and amended on February 24, 2017
and December 29, 2018, a unified income tax rate of 25% will be applied towards foreign
investment and foreign enterprises which have set up institutions or facilities in the PRC as well as
PRC enterprises. Under the EIT Law, enterprises established outside of China whose “de facto
management bodies” are located in China are considered “resident enterprises” and will generally
be subject to the unified 25% enterprise income tax rate as to their global income.
Enterprises that are recognized as high and new technology enterprises in accordance with the
Administrative Measures for the Determination of High and New Tech Enterprises ( ৷อҦஔΆ
) issued by the Ministry of Science, the Ministry of Finance (the “ MOF”) and
the State Administration of Taxation are entitled to enjoy a preferential enterprise income tax rate
of 15%, under which the validity period of the high and new technology enterprise qualification
shall be three years from the date of issuance of the certificate. An enterprise can re-apply for such
recognition as a high and new technology enterprise before or after the previous certificate expires.
V alue-added Tax
Pursuant to the Provisional Regulations on Value-added Tax of the PRC ( ʕശɛ͏΍ձ਷ᄣ
೼ᅲБૢԷ) amended by the State Council and became effective on November 19, 2017 and
the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax of
the PRC ( ) amended by the MOF on October 28,
2011 and effective on November 1, 2011, all entities and individuals in the PRC engaging in the
sale of goods, the provision of processing, repairs and replacement services, and the importation of
goods are required to pay value-added tax. For taxpayers selling or importing goods, the general
tax rate shall be 17% unless otherwise specified in the aforesaid regulations.
According to the Notice on the Adjustment to Value-added Tax Rates (೼ਕᐼ
) (Cai Shui [2018] No. 32), promulgated by the MOF and the State
Administration of Taxation on April 4, 2018, and became effective as of May 1, 2018, the
value-added tax rates of 17% and 11% applicable to the taxpayers who have value-added tax
taxable sales activities or imported goods are adjusted to 16% and 10%, respectively.
According to the Announcement on Relevant Policies for Deepening Value-Added Tax
Reform (ʮѓ ) (2019 No. 39 of MOF, State Administration of
Taxation and General Administration of Customs), promulgated by the MOF, the State
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Administration of Taxation and the GACC on March 20, 2019 and became effective on April 1,
2019, the value-added tax rates of 16% and 10% applicable to the taxpayers who have value-added
tax taxable sales activities or imported goods are adjusted to 13% and 9%, respectively.
On December 25, 2024, the SCNPC promulgated the Value-added Tax Law of the PRC ( ʕ
), which will come into effective on January 1, 2026, and replace the
Provisional Regulations on Value-added Tax of the PRC. The new law reaffirms the provisions of
the Provisional Regulations on Value-added Tax of the PRC and make changes in the areas of
taxable acts, tax jurisdiction, deemed sales, non-taxable items, simplified taxation, withholding
agents, input taxes, non-creditable input taxes, mixed sales, and input credit carry-forward and
refund.
Tax on Dividends
For Individual Investors
According to the Individual Income Tax Law of the PRC (),
or the Individual Income Tax Law, amended by the SCNPC on August 31, 2018 and effective on
January 1, 2019, and the Implementation Rules of the Individual Income Tax Law of the PRC ( ʕ
ૢԷ) amended by the State Council on December 18, 2018 and
effective on January 1, 2019, dividends paid by PRC companies to individual investors are
ordinarily subject to a withholding income tax levied at a flat rate of 20%. Meanwhile, according
to the Notice on Issues Concerning Differentiated Individual Income Tax Policies on Dividends
and Bonus of Listed Companies (ஷ
) issued by the Ministry of Finance, the State Administration of Taxation and the China
Securities Regulatory Commission (the “ CSRC”) on September 7, 2015 and effective on
September 8, 2015, where an individual holds the shares of a listed company obtained from the
public offering for more than one year and transfers the stock of the listed company on the stock
market, the dividend and bonus income shall be temporarily exempted from individual income tax.
Where an individual acquires shares of a listed company from the public offering and transfers the
stock of the listed company on the stock market, if the holding period is within one month
(inclusive), the dividend income shall be included in the taxable income in full; if the holding
period is more than one month but less than one year (inclusive), the dividend income shall be
included in the taxable income at the rate of 50%; the aforesaid income shall be subject to
individual income tax at a uniform rate of 20%.
Pursuant to the Arrangement between the Chinese mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (ᅄ೼ձԣ˟ਊဍ೼
τર), or the Arrangement for the Avoidance of Double Taxation and the Prevention of Fiscal
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Evasion with respect to Taxes on Income, executed on August 21, 2006, the PRC government may
impose tax on dividends paid by a PRC company to a Hong Kong resident (including natural
person and legal entity), but such tax shall not exceed 10% of the total amount of dividends
payable. If a Hong Kong resident directly holds 25% or more of the equity interests in a PRC
company and the Hong Kong resident is the beneficial owner of the dividends and meets other
conditions, such tax shall not exceed 5% of the total amount of dividends payable by the PRC
company. The Fifth Protocol to the Arrangement between the Chinese mainland and the Hong
Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income (ᅄ
ࣣ֛or the Fifth Protocol, issued by The State Administration
of Taxation and effective on December 6, 2019 provides that such provisions shall not apply to
arrangements or transactions made for one of the primary purposes of obtaining such tax benefits.
For Enterprise Investors
Pursuant to the Enterprise Income Tax Law of the PRC (),
or the EIT Law, amended by the SCNPC and effective on December 29, 2018, and the
Implementation Rules of the Enterprise Income Tax Law of the PRC (੻
ૢԷ), or the Implementation Rules of the EIT Law, last amended by the State Council
on December 6, 2024 and effective on January 20, 2025, a non-resident enterprise is subject to a
reduced rate of 10% enterprise income tax on PRC-sourced income, including dividends paid by a
PRC resident enterprise that issues and lists shares in Hong Kong, if such non-resident enterprise
does not have an establishment or place of business in the PRC or has an establishment or place of
business in the PRC but the PRC-sourced income is not actually connected with such
establishment or place of business in the PRC. The aforesaid income tax payable by non-resident
enterprises shall be withheld at source, and the payer shall be the withholding agent, and the tax
shall be withheld by the withholding agent from the payment or due payment every time it is paid
or due. Such tax may be reduced or exempted pursuant to an applicable treaty for the avoidance of
double taxation.
Pursuant to the Notice on the Issues Concerning Withholding the Enterprise Income Tax on
the Dividends Paid by Chinese Resident Enterprises to H Share Holders Which Are Overseas
Non-resident Enterprises (͏ΆุΣྤ̮ H˾ϔ˾ᖮΆุ
) issued by the State Administration of Taxation and effective on
November 6, 2008, a PRC resident enterprise is required to withhold enterprise income tax at a
rate of 10% on dividends paid to non-PRC resident enterprise holders of H Shares which are
derived out of profit generated since 2008. The Reply on the Collection of Enterprise Income Tax
on Dividends Received by Non-resident Enterprises from Holding B Shares and Other Shares ( ᗫ
͏Άุ՟੻ Bҭᔧ ) promulgated by the State
Administration of Taxation and effective on July 24, 2009 further provides that PRC-resident
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enterprises listed on Chinese and overseas stock exchanges by issuing stocks (including A shares,
B shares and overseas shares) must withhold enterprise income tax at a flat rate of 10% on
dividends of 2008 and onwards that it distributes to non-resident enterprise shareholders. Such tax
rates may be further modified pursuant to the tax treaty or agreement that China has concluded
with a relevant jurisdiction, where applicable.
According to the Arrangement between the Chinese mainland and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income, the PRC government may impose tax on dividends paid by a
PRC company to a Hong Kong resident (including natural person and legal entity), but such tax
shall not exceed 10% of the total dividends payable by the PRC company. If a Hong Kong resident
directly holds 25% or more of equity interest in a PRC company and the Hong Kong resident is
the beneficial owner of the dividends and meets other conditions, such tax shall not exceed 5% of
the total dividends payable by the PRC company. The Fifth Protocol provides that such provisions
shall not apply to arrangements or transactions made for one of the primary purposes of obtaining
such tax benefits.
Pursuant to applicable regulations, we intend to withhold tax at a rate of 10% from dividends
paid to non-PRC resident enterprise holders of our H Shares. Non-PRC resident enterprises that
are entitled to be taxed at a reduced rate under an applicable income tax treaty will be required to
apply to the PRC tax authorities for a refund of any amount withheld in excess of the applicable
treaty rate, and payment of such refund will be subject to the PRC tax authorities’ verification.
Tax related to equity transfer income
For Individual Investors
Under the Individual Income Tax Law and its implementation rules, individuals are subject to
individual income tax at a rate of 20% on gains realized on the sale of equity interests in PRC
resident enterprises. Pursuant to the Circular on Continuing the Temporary Exemption of
Individual Income Tax on Gains from Share Transfers by Individuals (੻ᘱ
), which was promulgated by the MOF and The State
Administration of Taxation and became effective on March 30, 1998, from January 1, 1997,
income of individuals from the transfer of shares in listed companies continues to be temporarily
exempted from individual income tax. The State Administration of Taxation does not specify
whether to continue to exempt individuals from personal income tax on the income from the
transfer of shares in listed company in the newly revised Individual Income Tax Law and
Implementation Rules of the Individual Income Tax Law.
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For Enterprise Investors
Under the EIT Law and its implementation rules, a non-PRC resident enterprise is subject to
enterprise income tax at the rate of 10% with respect to PRC-sourced income, including gains
derived from the disposal of shares in a PRC resident enterprise, if it does not have an
establishment or premises in the PRC or has an establishment or premises in the PRC but the
PRC-sourced income is not actually connected with such establishment or premises in the PRC.
The aforementioned income tax payable by non- PRC resident enterprises is subject to source
withholding, and the payer is the withholding agent. The tax shall be withheld by the withholding
agent from the payment or due payment every time it is paid or due. Such tax may be reduced or
exempted under applicable tax treaties or arrangements.
Stamp Duty
According to the Stamp Duty Law of the PRC (), which was
promulgated on June 10, 2021 and came into effect on July 1, 2022, all entities and individuals
who make taxable documents and conduct securities transactions within the territory of the PRC
are the taxpayers of stamp duty and shall pay stamp duty. All entities and individuals who make
taxable documents outside the territory of the PRC to be used within the territory of the PRC shall
pay stamp duty. The disposal of H Shares by non-Chinese mainland investors outside of the
Chinese mainland is not subject to the requirements of the Stamp Duty Law of the PRC.
Regulations on Data Security and Personal Information Protection
On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC ( ʕശɛ͏΍
) (the “ Data Security Law ”) which became effective on September 1, 2021. The
Data Security Law mainly sets forth specific provisions regarding establishing basic systems for
data security management, including data classification and hierarchical protection system, risk
assessment system, monitoring and early warning system and emergency disposal system. In
addition, it clarifies the data security protection obligations of organizations and individuals
carrying out data activities and implementing data security protection responsibility. The Data
Security Law stipulates measures to support and promote data security and development, to
establish and optimize the national data security management system and to clarify organizations’
and individuals’ responsibilities in data security.
On December 28, 2021, the Cyberspace Administration of China (the “ CAC”), jointly with
12 other administrative authorities, promulgated the revised Measures for Cybersecurity Review
(), which became effective on February 15, 2022. According to the Measures
for Cybersecurity Review, (i) that the purchase of cyber products and services by the Critical
Information Infrastructure Operator (the “ CIIO”), and the data processing activities carried out by
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online platform operators which affects or may affect national security, shall be subject to the
cybersecurity review by the Cybersecurity Review Office, the department which is responsible for
the implementation of cybersecurity review under the CAC; (ii) network platform operators with
personal information of more than one million users that seek for listing in a foreign country are
obliged to apply for a cybersecurity review by the Cybersecurity Review Office; and (iii) the
relevant regulatory authorities may initiate cybersecurity review if such regulatory authorities
determine that the issuer’s network products or services, or data processing activities affect or may
affect national security.
On September 30, 2024, the State Council published the Administration Regulations on
Network Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ)( “ Data Security Regulations ”), which
became effective on January 1, 2025. The Data Security Regulations provides that network data
processors conduct network data processing activities that affects or may possibly affect national
security must conduct national security review in accordance with relevant laws and regulations. It
also imposes specific requirements for network data processors that process important data. The
Data Security Regulations define “important data” as “data in specific fields, specific groups,
specific regions or reaching certain accuracy and scale, which if tampered with, destroyed, leaked
or illegally obtained or used may directly endanger national security, economic operation, social
stability, public health and safety.” The Data Security Regulations calls for the national data
security coordination mechanism to coordinate with relevant authorities to issue catalogues of
“important data” in relevant regions and sectors. Network data processors must identify and report
the “important data” processed by them to relevant authorities, who are required to notify the
network data processors or publish the results to the public in a timely manner. The Data Security
Regulations imposes several compliance obligations on network data processors that process
important data, including but not limited to, (i) appoint a network data security officer and
establish an internal data security management organization; (ii) conduct a risk assessment before
sharing, entrusting vendors for processing or jointly processing of important data, unless the above
processing activities are necessary for fulfilling legal duties or obligations; (iii) report the
important data disposition plan (including the name and contact information of the recipient of the
important data) to competent authorities at the provincial level before a merger, division,
dissolution, or bankruptcy that could materially affect the security of important data; and (iv)
conduct an annual risk assessment of network data processing activities and submit a risk
assessment report to the relevant authorities at the provincial level which will then share the report
with the provincial branch of the CAC and the public security authority.
As of the Latest Practicable Date, (i) we have not been notified by any PRC government
authorities that we are classified as a CIIO which may be subject to cybersecurity review in
circumstances that may affect national security in accordance with the Measures for Cybersecurity
Review; (ii) the data we collect and generate within Chinese mainland is stored within its territory,
and our daily operations and the Listing do not involve the cross-border transfer of identified core
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data, important data or a significant volume of personal information; (iii) we have not received any
inquiries, notices, warnings from PRC government authorities, nor have we been subject to any
investigations, sanctions or penalties made by any PRC government authorities related to national
security risks caused by our business operations or the proposed Listing; and (iv) we have not been
involved in any services, products or data processing activities that might pose national security
risks as set forth in Article 10 of the Measures for Cybersecurity Review, and we have not been
inquired about, investigated, warned or penalized by any PRC government authorities in this
respect. Based on foregoing, our PRC Legal Advisor is of the view that, as of the Latest
Practicable Date, the likelihood that our business operations and/or the Listing give rise to national
security risks which subject us to cybersecurity review under the Measures for Cybersecurity
Review is relatively low.
According to the Civil Code, personal information of an individual shall be protected by the
law. Any organization or individual that needs to obtain personal information of others shall obtain
such information legally and ensure the safety of such information, and shall not illegally collect,
use, process or transmit personal information of others, or illegally purchase or sell, provide or
publish personal information of others. In addition, the processing of personal information shall
follow the principles of lawfulness, appropriateness and necessity.
The Personal Information Protection Law of the PRC ()
(the “ Personal Information Protection Law ”), which was promulgated by the SCNPC on August
20, 2021 and became effective on November 1, 2021 requires that the processing of personal
information should have a clear and reasonable purpose and should be limited to the minimum
scope necessary to achieve the processing purpose, adopt a method that has the least impact on
personal rights and interests, and shall not process personal information that is not related to the
processing purpose.
As advised by our PRC Legal Advisor, during the Track Record Period and up to the Latest
Practicable Date, we had not been subject to any material fines, administrative penalties, or other
sanctions from relevant regulatory authorities for violations of data privacy and security laws and
regulations.
Regulations on the Application of Artificial Intelligence Technologies
On July 10, 2023, the CAC, along with several other departments, issued the Interim
Measures for the Management of Generative Artificial Intelligence Services (؂
,t h e“ Generative AI Measures ”), which became effective on August 15, 2023.
The Generative AI Measures apply to the use of generative artificial intelligence technologies to
provide the public within the PRC with services for generating text, pictures, audio, videos and
other content. According to the Generative AI Measures, service providers shall fulfill their
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obligations to protect users’ input information and usage records in accordance with the law, and
shall not collect unnecessary personal information, or illegally retain input information or usage
records that can identify a user or illegally provide users’ input information or usage records to
others.
On March 7, 2025, the CAC, the MIIT, the Ministry of Public Security and the National
Radio and Television Administration jointly promulgated the Measures for the Labeling of
AI-Generated Synthetic Content (,t h e“ AIGC Measures ”),
which became effective on September 1, 2025. The AIGC Measures target Internet information
service providers that utilize generative AI technologies to provide services or produce information
for public dissemination, and require that all AI-generated text, images, audio, video and virtual
scenes and other information be clearly identified with both explicit and implicit markings.
The Company neither provides Internet information services nor utilizes generative AI
technologies to offer content generation services (such as text, images, audio, or video) to the
public. Consequently, as advised by our PRC Legal Advisors, neither the Generative AI Measures
nor the AIGC Measures apply to the Company’s operations or products.
Regulations Relating to Overseas Offering and Listing
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the
Overseas Securities Offering and Listing by Domestic Enterprises ( ྤʫΆุྤ̮೯БᗇՎձɪ
) and relevant five guidelines (the “ Overseas Listing Trial Measures ”), which
came into effect on March 31, 2023. According to the Overseas Listing Trial Measures, PRC
domestic enterprises that seek to offer and list securities in overseas markets, either in direct or
indirect means (the “ Overseas Offering and Listing ”), are required to fulfill the filing procedure
with the CSRC and submit filing reports, legal opinions, and other relevant documents. Subject to
specific circumstances, the Overseas Listing Trial Measures require that, among other things, (i)
initial public offerings or listings on overseas markets shall be filed with the CSRC within three
working days after the relevant application is submitted overseas, (ii) subsequent securities
offerings of an issuer on the same overseas market where it has previously offered and listed
securities shall be filed with the CSRC within three working days after the offering is completed,
and (iii) subsequent securities offerings or listings of an issuer on other overseas markets other
than where it has offered and listed securities shall be filed with the CSRC within three working
days after the relevant application is submitted overseas. If a PRC company fails to complete the
filing procedure or the filing documents submitted by a PRC company contain misrepresentation,
misleading statement or material omission, such PRC company may be subject to order to rectify,
warnings and fines, and its controlling shareholders, actual controllers, the person directly in
charge and other directly responsible persons may also be subject to fines.
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The Overseas Listing Trial Measures also set forth the issuer’s reporting obligations in the
event of occurrence of material events (the “ Material Events ”) after the Overseas Offering and
Listing. Upon the occurrence of any of the Material Events specified below after the Overseas
Offering and Listing, the issuer shall make a detailed report to the CSRC within 3 working days
after the occurrence and public announcement of the relevant event: (i) change in controlling
rights; (ii) being subject to investigation, punishment or other measures by overseas securities
regulatory authorities or the relevant authorities; (iii) changing listing status or changing the listing
board; or (iv) voluntary or compulsory termination of listing. Besides, if any material change in
the principal business and operation of the issuer after its Overseas Offering and Listing makes the
issuer no longer within the scope of record-filing, the issuer shall submit a special report and a
legal opinion issued by a PRC domestic law firm to the CSRC within 3 working days after the
occurrence of the relevant change to provide an explanation of the relevant situation. According to
the Overseas Listing Trial Measures, the PRC domestic enterprises engaging in Overseas Offering
and Listing activities shall strictly comply with the PRC laws, administrative regulations, and
relevant provisions on foreign investment, state-owned assets, industry regulation, overseas
investment, etc., shall not disrupt domestic market order, and shall not harm national interests,
public interests and the legitimate rights and interests of domestic investors. The PRC domestic
enterprise that conducts Overseas Offering and Listing shall (i) formulate its articles of
association, improve its internal control system and standardize its corporate governance, financial
affairs and accounting activities in accordance with the PRC Company Law, the PRC Accounting
Law and other PRC laws, administrative regulations and applicable provisions; (ii) abide by the
legal system of the PRC on confidentiality and take necessary measures to implement the
confidentiality responsibility, shall not divulge any state secret or the work secrets of state
authorities, and shall also comply with laws, administrative regulations and the relevant provisions
of the PRC where involved in the overseas provisions of personal information and important data.
In addition, the Overseas Listing Trial Measures also provides the circumstances where the
Overseas Offering and Listing is explicitly prohibited, including: (i) such securities offering and
listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state
rules; (ii) the Overseas Offering and Listing may endanger national security as reviewed and
determined by competent authorities under the State Council in accordance with law; (iii) the PRC
domestic enterprise, or its controlling shareholder(s) and the actual controller, have committed
relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or
undermining the order of the socialist market economy during the latest three years; (iv) the PRC
domestic enterprise is currently under investigations for suspicion of criminal offenses or major
violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are
material ownership disputes over equity held by the controlling shareholder(s) or by other
shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
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On February 24, 2023, the CSRC together with Ministry of Finance of the PRC and National
Administration of State Secrets Protection and National Archives Administration of China have
promulgated the Provisions on Strengthening the Confidentiality and Archives Administration
Concerning the Overseas Securities Offering and Listing by Domestic Enterprises (̋੶ྤʫ
 ), according to which, during the
overseas offering and listing activities of domestic enterprises, domestic enterprises, securities
companies and securities service providers providing corresponding services shall strictly abide by
the relevant PRC laws and regulation as well as the requirements of the provisions, enhance legal
awareness of guarding state secrets and strengthening the management of archives, establish and
complete systems for confidentiality and archives work, employ necessary measures to implement
the responsibility for confidentiality and archives management, and shall not divulge state secrets
and work secrets of state organs, and shall not harm the interests of state and the public. If
domestic enterprises provide or publicly disclose to relevant securities companies, securities
service institutions, overseas regulatory agencies and other parties, or provide or publicly disclose
documents and materials involving state secrets or state organ work secrets through the issuer, they
shall report the matters to the competent authorities for examination and approval, and file them
with the department for the administration and management of state secrets at the same level for
the record.
Pursuant to the Notice on Issues Concerning the Administration of Funds for Overseas
Listings of Domestic Enterprises (Draft for Comments) (၍ଣϞᗫਪ
ٝ(ᅄӋจԈᇃ )) issued by the People’s Bank of China and the SAFE on May 23, 2025
for public comments, domestic joint-stock limited companies that have completed the relevant
filings with the CSRC and have directly issued shares overseas or issued overseas depository
receipts (overseas listings) shall be subject to the provisions of this Notice. In addition to other
requirements, such domestic joint-stock limited companies shall, within 30 working days after the
completion of the overseas listing issuance or the over-allotment option exercise, submit relevant
documents to the local bank to apply for the registration for overseas listing. In the event of any
changes (such as changes in corporate information or adjustments to the equity structure), the
company shall apply for the registration for changes accordingly. In addition, the funds raised by
such domestic joint-stock limited companies through overseas listings shall, in principle, be
repatriated to the domestic jurisdiction in a timely manner. If such funds are to be retained
overseas for the purpose of engaging in overseas direct investment, overseas securities investment,
overseas lending or other similar activities, the relevant business authorities’ approval or filing
documents shall be obtained prior to the completion of the overseas listing issuance or the
over-allotment option exercise, and such activities shall comply with the relevant cross-border
capital management regulations. As of the Latest Practicable Date, such Notice is released for
public comments only and has not yet been finalized or implemented, and we cannot predict when
or in what form it may ultimately be adopted.
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FINAL RULE BY THE U.S. DEPARTMENT OF THE TREASURY
On October 28, 2024, the U.S. Department of the Treasury (the “ Department of Treasury ”)
issued the “Provisions Pertaining to U.S. Investments in Certain National Security Technologies
and Products in Countries of Concern” (the “ Final Rule ”) to implement an outbound investment
program that restricts investments by U.S. persons and U.S.-controlled entities. The Final Rule
became effective on January 2, 2025.
The Final Rule applies to investments by U.S. person as to “covered transactions” involving
“covered foreign person” associated with a “country of concern” in “covered activities” in three
sectors pertaining to national security technologies and products: (1) semiconductors and
microelectronics, (2) quantum information technologies and (3) artificial intelligence. Covered
transactions under the Final Rule include a range of investment activities, such as equity
acquisitions, debt financing, and joint ventures, with some transactions outright prohibited and
others subject to notification requirements. Exceptions are available for specific categories of
transactions, including investments in publicly traded securities under certain conditions.
We are a “person of a country of concern” as defined in the Final Rule since we are
registered in China. However, After consultation with our legal advisor as to U.S. sanctions, our
Directors understand that the impact of the Final Rule is generally limited and manageable because
our business activities do not constitute “covered activities” in the Final Rule, as we are primarily
engaged in the production of wireless communication modules, which are not covered under the
specified sectors under the Final Rule.
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OVERVIEW
Our history can be traced back to April 2007, when our predecessor, Shenzhen Forge
Electronics Co. Ltd. (ʮ̡ ), was established in the PRC. From 2007 to 2011,
our Company was in its early stage of development, focusing on, among others, our research and
development of precision components, expanding our sales network and enhancing our market
recognition. In January 2011, we changed our name to Shenzhen Forge Precision Components Co.,
Ltd. (ʮ̡ ). In May 2015, we were converted from a limited liability
company into a joint stock limited company and renamed as Shenzhen MeiG Smart Technology
C o . ,L t d .(ʮ̡ ). In June 2017, our A Shares were listed on the
Shenzhen Stock Exchange under the stock code 002881 and our name was changed into MeiG
Smart Technology Co., Ltd. (ʮ̡ ) in December 2017.
Over years, we have evolved into a globally leading provider of wireless communication
modules and solutions, with a focus on smart modules, particularly high-computing-power smart
modules. Mr. WANG Ping is our chairman of the Board, executive Director and our Controlling
Shareholder. For details of his background and industry experience, please refer to “Directors and
Senior Management” in this prospectus.
BUSINESS MILESTONES
The following is a summary of our key business development milestones.
Y ear Event
2007 We were established in Shenzhen, focusing on the research and development,
production, and sales of precision components for terminal products, primarily for
smartphones.
2012 We established our research and development center in Shanghai and commenced
our product design and development in the field of 4G wireless communications.
2013 Our 4G wireless data terminals became one of the first to achieve mass production.
2014 We increased our investment in the research and development for 4G technology,
and subsequently established R&D centers in Xi’an and Wuhan.
We launched our first-generation smart module product.
2015 We were converted into a joint stock limited company.
HISTORY AND CORPORATE STRUCTURE
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Y ear Event
2017 Our A Shares were listed on Shenzhen Stock Exchange (stock code: 002881).
2019 We placed greater emphasis on our wireless communication and IoT operations and
launched our 5G data transmission modules, heralding the transition from 4G to 5G
technology.
2020 We launched our 5G smart module products and began the research and designing
of these products for the smart cockpit sector.
2021 Our 5G smart module products have achieved mass production and became
deployed in new energy vehicles for leading industry clients.
2023 We completed a private placement in the A-share market.
We launched high-computing-power smart modules with AI computing power
reaching 48 TOPS and began our research on deploying large models on
high-computing-power smart modules.
2024 We established a research and development center in Nantong to further strengthen
our R&D resource allocation.
2025 The application of our high-computing-power smart module products expanded
into emerging fields such as robotics.
OUR MAJOR SUBSIDIARIES
The following sets out the principal business activities, place of establishment, date of
establishment and commencement of business of our subsidiaries that made a material contribution
to our results of operations during the Track Record Period.
Name of subsidiary
Place of
establishment
Date of
establishment
Equity interest
attributable to
our Group
Principal business
activities
MeiG Zhilian .......... PRC October 15,
2018
100% R&D and design
ZhongGe Shanghai ...... PRC March 23, 2018 100% R&D and design
Xi’an ZhaoGe ......... PRC October 23,
2014
100% R&D and design
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Name of subsidiary
Place of
establishment
Date of
establishment
Equity interest
attributable to
our Group
Principal business
activities
MeiG Investment ....... PRC December 31,
2019
100% Investment
Forge International ...... Hong Kong December 16,
2014
100% Sales and supply
chain
As of the date of this prospectus, our Company had nine subsidiaries, all of which were
wholly owned by us. For further details of these subsidiaries, please see “Corporate Structure” in
this section. For changes in the registered capital of our subsidiaries, please see “Statutory and
General Information — A. Further Information about Our Group — 3. Changes in the Share
Capital of Our Subsidiaries” in Appendix VI to this prospectus.
MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
Early Development and Conversion into a Joint Stock Company
Our Company was established on April 5, 2007, under the laws of the PRC as a limited
liability company with an initial registered capital of RMB1 million, which was contributed as to
99% by Mr. WANG Guojun (ࠏthe father of Mr. WANG Ping and Mr. WANG Cheng ( ˮϓ)
and an financial investor in the precision components industry, and 1% by Ms. CHEN Jianqi (ܔ
ೡ), a former employee. Since its inception, through years of experience in the precision
components industry, the Company marched into wireless communications sector from precision
components industry.
In November 2008, Ms. CHEN Jianqi transferred all of her equity interests in the Company at
nominal value to Mr. ZHAO Haifeng (ࢤa former employee. In January 2011, the equity
interests of our Company were all transferred to Mr. WANG Ping and Mr. WANG Cheng from Mr.
WANG Guojun and Mr. ZHAO Haifeng, respectively. Upon the completion of the share transfer,
Mr. WANG Ping and Mr. WANG Cheng held interests in our Company as to 99% and 1%,
respectively.
Between May 2011 and July 2014, our Company underwent several rounds of capital
increases and transfers contributed by Mr. WANG Ping and Mr. WANG Cheng either themselves
directly or through ZhaoGe Investment. Upon completion, our registered capital increased to
RMB70,000,000.
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On August 19, 2014, our Company entered into a capital increase agreement with
Fenghuangshan Investment, pursuant to which Fenghuangshan Investment agreed to subscribe for
RMB7,348,000 of the registered capital at a consideration of RMB19 million. Fenghuangshan
Investment decided to invest in our Company as it recognized our corporate value and business
prospects. The consideration was determined after arm’s length negotiations with reference to our
net profits and net assets as of December 31, 2013. Upon completion of the capital subscription,
our registered capital increased to RMB77,348,000.
On May 14, 2015, our Company was converted into a joint stock limited company. Upon
completion of the conversion, our Company had a total share capital of RMB80,000,000, divided
into 80,000,000 Shares. The shareholding structure of our Company immediately following our
conversion into a joint stock limited company was as follows:
Shareholder Number of Shares
Percentage
shareholding
Mr. WANG Ping ................................... 46,336,000 57.92%
ZhaoGe Investment ................................. 14,480,000 18.10%
Mr. WANG Cheng .................................. 11,584,000 14.48%
Shenzhen Fenghuangshan Cultural Tourism Investment Co.,
Ltd. (ʮ̡ )
(“Fenghuangshan Investment ”)(1) ................... 7,600,000 9.50%
Total ............................................ 80,000,000 100.00%
Note:
(1) As of the Latest Practicable Date, Fenghuangshan Investment was wholly owned by Shenzhen Fenghuang
Joint-Stock Cooperative Company (΅ΥЪʮ̡ ), a joint-stock enterprise jointly funded and operated
by rural collective economic organizations or their members. To the best knowledge of the Company, each of
Fenghuangshan Investment and its ultimate beneficial owners was an Independent Third Party.
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Listing on the Shenzhen Stock Exchange
On June 22, 2017, our A Shares were listed on the Shenzhen Stock Exchange under the stock
code 002881. In connection with the A Share listing, we issued an aggregate of 26,670,000 A
Shares, accounting for approximately 25.0% of our then enlarged share capital, raising net
proceeds of approximately RMB208.76 million. The shareholding structure of our Company
immediately following our A Share listing was as follows:
Shareholder Number of Shares
Percentage
shareholding
Mr. WANG Ping ................................... 46,336,000 43.44%
ZhaoGe Investment ................................. 14,480,000 13.57%
Mr. WANG Cheng .................................. 11,584,000 10.86%
Fenghuangshan Investment ........................... 7,600,000 7.12%
Other A Shareholders ............................... 26,670,000 25.00%
Total ............................................ 106,670,000 100.00%
Subsequent to the completion of the A Share Listing, there had been several instances of
share capital changes of our Company as a result of capitalization issue and issuance of A Shares
for employee incentive purpose under our 2020 Equity Incentive Plans. As of September 2022, the
total share capital of our Company reached RMB239,429,451, divided into 239,429,451 A Shares.
Private Placing of A Shares in 2023
In March 2023, we completed a private placing of 21,208,503 A Shares to 21 subscribers at a
price of RMB28.46 per Share, which was determined with reference to the average price of our A
Shares for 20 trading days prior to the pricing day. The 21 subscribers comprised China Asset
Management Co., Ltd. (ʮ̡ ), Nord Fund Management Co., Ltd. (၍ଣ
ʮ̡), Invesco Great Wall Fund Management Co., Ltd. (ʮ̡ ),
Taikang Asset Management Co., Ltd. (ப΂ʮ̡ ), China Huadian Corporation
Capital Holdings Co., Ltd. (ʮ̡ ), UBS AG, China Securities Co.,
Ltd. (ʮ̡ ), Huatai Asset Management Co., Ltd. (ʮ̡ ),
Dalian Hairong Hi-tech Venture Capital Management Co., Ltd. (ࠢ
ʮ̡), Hubei Gaotou Hanjiang Equity Investment Partnership (Limited Partnership) ( ಳ̏৷ҳဏϪ
ᛆҳ༟ΥྫΆุ (Υྫ)), Shengang Securities Co., Ltd. (ʮ̡ ), Shanghai
Chunda Asset Management Co., Ltd. (ʮ̡ ), Xingzheng Global Fund
Management Co., Ltd. (ʮ̡ ), Guangxi Yuwan Business Consulting Co.,
Ltd. (ʮ̡ ), Caitong Fund Management Co., Ltd. (ʮ
̡), all of which are fund and asset managers, together with funds and/or asset management
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products under their management. Each of them was an Independent Third Party to the best
knowledge of our Directors. Except for Huatai Asset Management Co., Ltd. (ʮ
̡) and its asset management products, which collectively subscribed for approximately 1.98% of
our then-enlarged total share capital, none of the other subscribers held more than 1% of our
then-enlarged total share capital. We raised net proceeds of approximately RMB592.93 million
from the placing, which were used for development of our 5G and AIoT communication modules,
R&D center construction project, and for our general working capital. As a result of the placing,
our total share capital increased to RMB260,637,954 comprising 260,637,954 A Shares. As of
September 30, 2025, 45.6% of the proceeds received have been utilized.
Subsequent Shareholding Changes
Subsequent to the completion of the private placing of A Shares in 2023, there had been
several instances of share capital changes of our Company as a result of repurchase and issuance
of A Shares under our 2020 Equity Incentive Plans. Pursuant to the exercise of stock options and
the repurchase and cancellation of Shares under our equity incentive plans and repurchase
mandates, the total share capital of our Company reached RMB261,756,700, divided into
261,756,700 A Shares as of the Latest Practicable Date. For details of changes in share capital of
our Company within the two years immediately preceding the date of this prospectus, see
“Statutory and General Information — A. Further Information about Our Group — 2. Changes in
the Share Capital of Our Company” in Appendix VI to this prospectus.
MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
During the Track Record Period and up to the Latest Practicable Date, we had not conducted
any acquisitions, disposals or mergers that we consider material to us.
OUR A SHARE LISTING AND REASONS FOR THE H SHARE LISTING
Since June 2017, our A Shares have been listed on the Main Board of the Shenzhen Stock
Exchange. Our Directors confirmed that, and our PRC Legal Advisor is of the view that, having
made all reasonable inquiries, throughout the last two full financial years (i.e., for the two years
ended December 31, 2023 and 2024) and up to the Latest Practicable Date, there had been no
instances of our material non-compliance with the applicable rules of the Shenzhen Stock
Exchange and other applicable PRC securities laws and regulations. To the best knowledge of our
Directors having made all reasonable enquiries, there are no material matters in relation to our
compliance record on the Shenzhen Stock Exchange that should be brought to the attention of the
Stock Exchange or potential investors of the Global Offering. Based on the independent due
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diligence conducted by the Sole Sponsor, nothing has come to the Sole Sponsor’s attention that
would cause it to disagree with our Directors’ confirmation with regard to the compliance records
of the Company on the Shenzhen Stock Exchange.
We seek to list our H Shares on the Stock Exchange to raise additional capital for business
growth and expansion, diversify our fundraising channels, reinforce our industry standing, enhance
global brand awareness and competitiveness, and optimize our capital structure and shareholder
composition to support sustainable development and governance. Please see “Business — Our
Strategies” and “Future Plans and Use of Proceeds” in this prospectus for more details.
EQUITY INCENTIVE PLANS
In order to incentivize our employees, we adopted the Equity Incentive Plans in June 2020
and May 2024, respectively. The 2020 Equity Incentive Plans expired in June 2024. Our 2024
Equity Incentive Plans were approved by our Shareholders on June 17, 2024, with a term of five
years. For further details of our 2024 Equity Incentive Plans, please see “Statutory and General
Information — D. 2024 Equity Incentive Plans” in Appendix VI to this prospectus.
PUBLIC FLOAT
Rule 19A.13A(2) of the Listing Rules provides that, where a new applicant is a PRC issuer
with other listed shares at the time of Listing, this will normally mean that the portion of H shares
for which Listing is sought that are held by the public, at the time of Listing, must (a) represent at
least 10% of the issuer’s total number of issued shares in the class to which H shares belong
(excluding treasury shares); or (b) have an expected market value of not less than
HK$3,000,000,000.
Our A Shares are listed on the Shenzhen Stock Exchange. So far as our Directors are aware,
immediately following the completion of the Global Offering (assuming that (i) no additional
Shares are issued pursuant to our Equity Incentive Plans and (ii) the Offer Size Adjustment Option
is not exercised), all 35,000,000 H Shares to be issued pursuant to the Global Offering,
approximately 11.79% of our total issued Shares, will be counted towards the public float for the
purpose of Rule 19A.13A(2) of the Listing Rules. Therefore, the Company believes that it will
comply with the public float requirement under Rule 19A.13A(2) of the Listing Rules.
FREE FLOAT
Immediately following the completion of the Global Offering (assuming that (i) no additional Shares
are issued pursuant to our Equity Incentive Plans and (ii) the Offer Size Adjustment Option is not
exercised), based on the maximum Offer Price of HK$28.86 per Share, at least 5% of the total number of
issued shares with an expected market value at the time of listing of not less than HK$50,000,000 are
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not subject to any disposal restrictions. Therefore, the Company believes that there will be a free
and open market for its Shares immediately upon the completion of the Global Offering in
compliance with the free float requirements under Rule 8.08A and Rule 19A.13C of the Listing
Rules.
CORPORATE STRUCTURE
Corporate Structure Immediately Before the Global Offering
The following chart sets forth the simplified shareholding and corporate structure of our
Group immediately before the Global Offering.
39.13% 10.03%
100%100%100%100%100%100%100%100%
50.62%0.22%
100%
WANG Ping(1)
MeiG Zhilian
(PRC)
ZhongGe Shanghai
(PRC)
Xi’an ZhaoGe
(PRC)
Shanghai Meixiao
(PRC) (PRC)
ZhongGe Nantong MeiG Investment
(PRC)
Forge International
(Hong Kong)
MeiG Smart Technology
(Europe) GmbH
(Germany)
ZhaoGe Investment(1)
Other
A Shareholders(3)
Our Directors and
Senior Management
Members(2)
MeiG Smart
Technology France
(France)
Our Company
Notes:
(1) As of the Latest Practicable Date, Mr. WANG Ping directly held 102,417,560 A Shares, of which 12,850,000 A
shares have been pledged as security for Mr. Wang’s financing needs of his other personal investments. ZhaoGe
Investment was controlled by Mr. WANG Ping, our Controlling Shareholder, as its general partner and holding
29.31% of the partnership interests. The remaining partnership interests in ZhaoGe Investment were held by 12
limited partners including our Directors and current or former employees of our Company pursuant to our Equity
Incentive Plans: (i) 24.1% was held by Mr. DU Guobin, our executive Director and vice chairman of the Board; (ii)
11.45% was held by Mr. WANG Cheng, the brother of Mr. WANG Ping; (iii) 9.18% was held by Ningbo Zhige
Enterprise Management Co., Ltd. (ʮ̡ )( “ Ningbo Zhige ”) (which is owned by Mr. WANG
Cheng as to 42.93%, Mr. DU Guobin as to 23.63%), Mr. ZHANG Chengzan ( ੵϓᗎ) as to 3.81%, a former
director of our subsidiary, and five former employees as to 6.52%, each of whom holding less than 5% interests
therein; (iv) 6.09% was held by LI Peng ( ҽᘄ), our mid-level management; (v) 5.97% by FAN Dian (Պ), our
mid-level management; (vi) 3.73% was held by Mr. XIA Youqing, our executive Director, chief financial officer
and vice general manager; and (vii) 10.16% was held by our former employees, each holding less than 5%. Except
for Mr. WANG Ping, Mr. DU Guobin, Mr. WANG Cheng, Mr. XIA Youqing and Ningbo Zhige, each of the
shareholders of ZhaoGe Investment is an Independent Third Party. Pursuant to the partnership agreement of ZhaoGe
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Investment, the general partner is responsible for day-to-day management of the partnership and can exercise the
voting rights held by ZhaoGe Investment in our Company. None of the limited partners of ZhaoGe Investment had
any voting arrangement or concert-party arrangement with our Controlling Shareholders.
(2) Included 390,000 A Shares held by Mr. DU Guobin, 104,000 A Shares held by Mr. XIA Youqing, and 78,000 A
Shares held by Mr. HUANG Min.
(3) As of the Latest Practicable Date, to the best knowledge of the Company, (i) HU Peize (੃ዣ), an Independent
Third Party, held approximately 3.72% of the total share capital of our Company; (ii) Fenghuangshan Investment, a
wholly-owned subsidiary of Shenzhen Fenghuang Joint-Stock Cooperative Company (΅ΥЪʮ̡ )
which is a joint-stock enterprise jointly funded and operated by rural collective economic organizations or their
members, held approximately 2.61% of the total share capital of our Company and was an Independent Third Party;
and (iii) HKSCC, an Independent Third Party, held approximately 0.32% of the total share capital of our Company.
Save for the aforementioned, the equity interests held by our remaining A Shareholders are less than 1%.
Corporate Structure Immediately After the Global Offering
The following chart sets forth the simplified shareholding and corporate structure of our
Group immediately after the completion the Global Offering.
34.51% 8.85% 0.19% 44.66% 11.79%
100%100%100%100%100%100%100%100%
100%
Other
A Shareholders H Shareholders(3)
WANG Ping(1) ZhaoGe Investment(1)
Our Directors and
Senior Management
Members(2)
MeiG Zhilian
(PRC)
ZhongGe Shanghai
(PRC)
Xi’an ZhaoGe
(PRC)
Shanghai Meixiao
(PRC) (PRC)
ZhongGe Nantong MeiG Investment
(PRC)
Forge International
(Hong Kong)
MeiG Smart Technology
(Europe) GmbH
(Germany)
MeiG Smart
Technology France
(France)
Our Company
Notes:
(1)−(3) Please see “Corporate Structure — Corporate Structure Immediately Before the Global Offering” in this section.
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OVERVIEW
About Us
We are a globally leading provider of wireless communication modules and solutions, with a
focus on smart modules, particularly high-computing-power smart modules. Our modules and
solutions are widely applied across the general IoT, ICV and wireless broadband sectors.
According to Frost & Sullivan, we ranked fourth in the global wireless communication module
industry in terms of revenue from wireless communication module business in 2024, accounting
for 6.4% of the global market share. According to the same source, the global wireless
communication module market is highly concentrated, with the three largest players accounting for
65.7% of global market revenue in 2024 (the largest player alone holding a 42.7% market share),
compared to our 6.4% market share despite ranking fourth.
Wireless communication modules are products typically equipped with communication
functions designed to enable the transmission and processing of large volumes of data over long
distances. Our portfolio of wireless communication modules includes:
 Smart modules , which are equipped with SoC processors and smart operating systems,
and can be further categorized into:
— High-computing-power smart modules , primarily designed to run complex
algorithms and to support on-device AI applications; and
— Regular smart modules , primarily designed for smart applications such as custom
software and multi-media functions.
 Data transmission modules , primarily designed for data communication, security and
high-throughput data exchange.
Leveraging our wireless communication module technologies, we develop customized
solutions tailored to the specific requirements of various application sectors, addressing the diverse
needs of our customers. They represent value-add beyond the provision of hardware, as they are
highly integrated offerings that combine our module with a substantial layer of customized
software, hardware and application-specific R&D services. This includes complex system-level
software and firmware customization to enable unique features and optimize performance, as well
as providing integral R&D services to co-develop and ensure the integration of the final tailored
solution into the customer’s specific application ecosystem. By delivering a functional subsystem
or a ready-to-use end product rather than a standalone component, we solve complex integration
challenges for our customers, significantly reducing their development cycles and technical risks,
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thereby accelerating their time to market. During the Track Record Period, customized products
and solutions for customers represented a substantial portion of our revenue, accounting for 78.4%,
84.5%, 86.3% and 90.5% of our revenue for the years ended December 31, 2022, 2023 and 2024
and the nine months ended September 30, 2025.
Our wireless communication modules and solutions are widely applied across general IoT,
ICV and wireless broadband sectors, and we are actively expanding into emerging on-device AI
applications such as robots.
Our Industry Leadership
We are driving and leading key industry trends in the wireless communication module
industry. As the industry evolves with advancements in new technologies, we have consistently
demonstrated our ability to anticipate and respond to these developments, particularly in the
following aspects:
 Transition to Smart Modules : The industry is seeing a shift from traditional data
transmission modules to smart modules amid the trend towards smart applications in
various downstream sectors. We have played a leading role in driving this transition.
According to Frost & Sullivan, we were the first company globally to (i) launch smart
module products, when we launched our smart module products back in 2014; and (ii)
achieve large-scale deployment of 5G smart modules in new energy vehicles, as our 5G
smart modules were first deployed on the new energy vehicles of a leading manufacturer
in China in 2021.
 Transition to On-Device AI Application : As AI computation gradually extends from
cloud to edge and local device levels, we are at the industry forefront of offering
high-computing-power smart modules, which serve as critical infrastructure to provide
robust hardware and software support for various on-device AI applications. According
to Frost & Sullivan, (i) we were the largest provider of high-computing-power smart
modules in terms of revenue from high-computing-power smart module business in
2024, accounting for 29.0% of the global market share; (ii) we were the first company
globally to develop a 48 TOPS high-computing-power smart module and to become one
of the designated suppliers of such modules for leading automobile manufacturers; and
(iii) in 2023, we successfully ran a text-to-image generative AI model on our
high-computing-power smart modules, making us the first company globally to
successfully run this kind of AI model on high-computing-power smart modules. As of
the Latest Practicable Date, we had a portfolio of high-computing-power smart modules
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with computing power ranging from 8 TOPS to 100 TOPS. Our high-computing-power
smart modules can support the deployment and operation of on-device versions of
various prevailing AI models.
 Transition to 5G Communication : We are one of the early movers in driving the
transition from 4G to 5G in the global wireless communication module industry,
supporting faster and more reliable connectivity of modules. According to Frost &
Sullivan, (i) we were among the first companies globally to launch 5G data transmission
module products; (ii) we were among the first companies globally to launch 5G-A and
5G RedCap module products; and (iii) in 2024, we ranked first in the industry in terms
of shipment volume of 5G in-vehicle modules, accounting for 35.1% of the global
market share.
Our Market Opportunities
We believe the market development in (i) smart applications; (ii) on-device AI; and (iii) 5G
communication present significant growth opportunities to us. According to Frost & Sullivan:
Increasing Demand for Smart Applications Across Core Industries
The general IoT industry is transitioning its focus from traditional “connectivity” functions to
smart applications, requiring higher levels of edge processing capabilities and hardware-software
integration in modules. For example, in scenarios such as smart industrial systems, smart retail and
smart cities, smart modules are gradually replacing traditional data transmission modules to
become the core hardware supporting edge computing, data analysis and real-time
decision-making.
In the ICV sector, demand for high-speed cellular connectivity and AI computing power
continues to grow. Automobile manufacturers increasingly require in-vehicle modules that balance
high-speed data rates, low latency and local AI inference capabilities. Regular smart modules and
high-computing-power smart modules with cellular connectivity are becoming critical components
of in-vehicle wireless communication modules, enabling multi-camera setups, multimedia
applications and driver monitoring systems. This creates new incremental demands for the wireless
communication module industry.
Emerging application sectors such as robots and edge servers are seeing increasing demand
for wireless communication modules. These sectors require modules with high computing power,
stable cellular connectivity and the ability to support complex AI models, driving new
technological innovations and industry opportunities.
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On-Device AI Driving the Growth of High-Computing-Power Smart Modules
The wireless communication module market is transitioning from basic data transmission
modules to modules that emphasize intelligence and high computing power, particularly those
designed to support on-device AI applications.
As large AI models become more lightweight, generative AI is increasingly transitioning from
the cloud to edge and local device levels, driving higher demand for module computing power and
intelligence. High-computing-power smart modules, typically offering single-chip AI computing
power of 8 TOPS or more, support mainstream AI frameworks and lightweight generative AI
operations, making them well-suited as hardware infrastructure for on-device AI applications.
Continued Penetration and Evolution of 5G Technology Driving Demand
The global penetration rate of 5G technology continues to rise, driving the development of
the wireless communication module market. The adoption rate of 5G in core industries such as
automotive, industrial and healthcare is expected to increase, creating long-term growth
opportunities for 5G-enabled module products.
The continued evolution of 5G technology, including advancements such as 5G-A and 5G
RedCap, brings benefits such as lower latency and higher connection density. These advancements
are creating new application scenarios and demands in industries requiring highly reliable and
low-latency communications. For example, the ICV sector is currently one of the fastest-growing
and best-performing application sectors for 5G communication modules.
Our Customer-Centric Approach
We are committed to a customer-centric approach. We focus on identifying industry trends
and potential customer needs. Besides addressing existing customer demands, we proactively
engage with customers to identify emerging market opportunities and explore how our products
can help them achieve their goals. We have consistently strengthened our capabilities in providing
tailored solutions across various application sectors. By delivering customized products and
delivering responsive support, we help our customers shorten the development and time-to-market
cycles of their end products.
Our Technology-Driven Culture
We are dedicated to building a technology-driven enterprise underpinned by research and
development. As a company primarily composed of engineers, we emphasize a people-oriented,
R&D-first, detail-focused corporate culture. This fosters collaboration and innovation within our
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engineering teams, allowing us to develop robust technologies and products that create value for
our customers and earn their recognition and trust. As of December 31, 2022, 2023, 2024 and
September 30, 2025, over 80% of our total workforce consisted of R&D and technology personnel.
This ratio significantly exceeds other leading companies in the industry, according to Frost &
Sullivan.
Our Business and Financial Performance
During the Track Record Period, our business and financial performance improved in the
following aspects:
 Increasing contribution from high-computing-power smart modules : Revenue from
high-computing-power smart modules and solutions as a percentage of our total revenue
increased from 1.5% in 2022 to 14.9% in 2023, 34.6% in 2024, and 34.2% in the nine
months ended September 30, 2025.
 Rising contribution from 5G-related products and solutions : Revenue from 5G-related
products and solutions as a percentage of our total revenue increased from 32.7% in
2022 to 37.3% in 2023, 43.9% in 2024, and 50.0% in the nine months ended September
30, 2025.
 Growth in overseas revenue : Our overseas revenue increased by 21.9% from RMB545.6
million in 2022 to RMB665.0 million in 2023, by 20.7% to RMB802.9 million in 2024,
and increased by 69.2% from RMB569.0 million in the nine months ended September
30, 2024 to RMB962.9 million in the nine months ended September 30, 2025.
 Growth in ICV-related revenue : Revenue from the ICV sector increased by 73.5% from
RMB342.2 million in 2022 to RMB593.6 million in 2023, by 105.7% to RMB1,220.9
million in 2024, and increased by 25.2% from RMB788.3 million in the nine months
ended September 30, 2024 to RMB986.9 million in the nine months ended September
30, 2025.
OUR STRENGTHS
Globally Leading Wireless Communication Module and Solution Provider
We are a globally leading provider of wireless communication modules and solutions.
Building on our technical expertise in the wireless communication module industry, we focus on
developing smart modules (including regular smart modules and high-computing-power smart
modules) and data transmission modules, with a strategic emphasis on three core application
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sectors: general IoT, ICV and wireless broadband. By offering high-computing-power smart
modules and customized solutions, we have established differentiated competitive advantages and
continue to drive technological advancements in the industry.
According to Frost & Sullivan:
 We ranked fourth in the global wireless communication module industry in terms of
revenue from wireless communication module business in 2024, accounting for 6.4% of
the total global market share in the same year. The global wireless communication
module market is highly concentrated, with the three largest players accounting for
65.7% of global market revenue in 2024 (the largest player alone holding a 42.7%
market share), compared to our 6.4% market share despite ranking fourth;
 Revenue from smart modules and solutions accounted for 41.5%, 56.7%, 62.9%, 63.9%
and 66.1% of our total revenue in 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, respectively, and revenue from high-computing-power
smart modules and solutions accounted for 1.5%, 14.9%, 34.6%, 29.4% and 34.2%
during the same periods. In 2024, the revenue contribution from our
high-computing-power smart modules and solutions was significantly higher than that of
other leading companies in the industry;
 Revenue from 5G-related module products and solutions accounted for 32.7%, 37.3%,
43.9%, 38.5% and 50.0% of our total revenue in 2022, 2023, 2024 and the nine months
ended September 30, 2024 and 2025, respectively. In 2024, the revenue contribution of
our 5G-related modules and solutions was higher than that of other leading companies in
the industry.
We have established competitive advantages in smart modules, especially
high-computing-power smart modules. As the industry increasingly demands greater intelligence
and computing power, we were among the first to identify high-computing-power smart modules as
a core strategic direction. Through continuous technological innovation and product upgrades, we
remain at the forefront of industry development. According to Frost & Sullivan:
In terms of smart modules:
 We were the first company globally to launch smart module products in 2014. Similar
products were not launched by competitors in the market until after 2015;
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 We were the first company globally to achieve large-scale deployment of 5G smart
modules in new energy vehicles in 2021, driven by substantial demand from a leading
domestic new energy vehicle manufacturer for high-performance modules supporting
ICV .
In terms of high-computing-power smart modules:
 We were the first company globally to develop a 48 TOPS high-computing-power smart
module and the first to become one of the designated suppliers for leading automobile
manufacturers for such modules at a time when other smart module providers had not
yet commercially launched 48 TOPS-level product in the broader market;
 In 2023, we successfully ran a text-to-image generative AI model on our
high-computing-power smart modules, making us the first company to successfully run
this kind of AI model on high-computing-power smart modules, demonstrating the
feasibility of generative AI tasks on edge hardware with 48 TOPS performance,
according to Frost & Sullivan;
 We ranked first in the global wireless communication module industry in terms of
revenue from high-computing-power smart module business in 2024, accounting for
29.0% of the global market share;
 We were among the first globally to launch high-computing-power smart modules based
on a mobile SoC platform developed by a leading technology company, with computing
power of up to 64 TOPS; and
 We were among the first globally to deploy high-computing-power smart modules in
prototype humanoid robots developed by a leading technology company. Our
high-computing-power smart modules were used for their robots’ main control units.
Our Early Entrant Advantages
We first introduced smart modules to the market, and have achieved large-scale deployment
of our smart modules across various industries, including POS machines and automotive vision
systems. Through these deployments, we have accumulated experience in product design and
engineering for diverse use cases, such as ensuring transmission stability and data security in
financial payment scenarios and achieving reliable interaction between smart modules and external
cameras in automotive applications.
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Building on our experience in smart modules, we were also among the first in the industry to
launch 5G smart modules. We customized 5G smart modules for intelligent cockpit applications
for leading new energy vehicle manufacturers. In 2024, shipments of our 5G smart modules for
these applications reached approximately 800 thousand units.
Our ability to achieve large-scale production of 5G smart modules has provided us valuable
operational experience and maintained our relationships with key customers. For example, our
extensive experience with 5G smart modules has supported the development and deployment of
our 48 TOPS high-computing-power smart module.
Our products and solutions are widely applied across three core sectors: general IoT, ICV and
wireless broadband, supporting the deployment of smart applications, on-device AI and 5G
communication in various scenarios. According to Frost & Sullivan, in 2024, we ranked first in the
industry in terms of shipment volume of 5G in-vehicle modules, accounting for 35.1% of the
global market share in the same year.
Technical Expertise and Continuous Innovation Driving Differentiated Technological
Advantages
We have developed expertise in regular smart modules and high-computing-power smart
modules, accumulating advantages across areas such as Android system development, multi-media
functionality, high-computing-power applications and on-device AI through technological iteration.
Leveraging our long-term and in-depth understanding of the chip platforms used in our modules,
we are able to develop module products based on the relevant chip platforms quickly and
efficiently. At the same time, we remain aligned with industry trends and continue to invest in
R&D to launch innovative products that meet industry trends. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, our R&D expenses amounted to RMB185.9 million,
RMB213.9 million, RMB208.1 million, RMB148.3 million and RMB153.1 million, respectively,
representing 8.1%, 10.0%, 7.1%, 6.8% and 5.4% of our total revenue for the respective periods,
respectively. The proportion of aggregate R&D expenses in aggregate revenue for the three years
ended December 31, 2024 was higher than the average in the global wireless communication
module industry, according to Frost & Sullivan.
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Our Technology Capabilities and Advancements
Regular Smart Modules and Related Technologies
We have built significant technical advantages in areas such as Android system driver
development, performance optimization, power consumption control and application integration.
These capabilities allow us to efficiently and reliably meet diverse customer needs. For example:
 System Driver Development : Our smart modules support multi-camera access,
multi-channel audio routing and multi-screen splitting functionality. For instance, system
drivers developed by us enable access to up to five cameras and split-screen operations
for three screens, addressing the needs of high-concurrency and multitasking scenarios.
Additionally, we have enhanced GPU computing power by optimizing its acceleration
engine, improving graphics processing efficiency and enhancing system rendering
capabilities;
 Performance Optimization : We possess competitive advantages in optimizing system
boot, memory allocation and multi-threaded load balancing. For example, our system
optimization can significantly reduce boot times across multiple platforms. Through
memory trimming and resource optimization, we can free up system memory and
improve device efficiency;
 Power Consumption Control : Our power optimization technology reduces device energy
consumption while maintaining performance. For portable devices such as video
recorders, we have controlled power consumption at low levels while ensuring normal
recording functionality. For specialized applications (for instance, specific adaptors or
low-temperature startup), we can optimize boot currents to meet the requirements of
different operating environments;
 Application Integration : We have accumulated experience in application integration for
specific industry scenarios. For example, in the industrial handheld devices (such as
PDA), we have integrated features such as barcode scanning and walkie-talkie
functionality, meeting the demands for portability and efficiency in industrial
environment. For automotive applications, our products and solutions support
navigation, intelligent driving and network management, providing technological
support for smart driving.
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High-Computing-Power Smart Modules and On-Device AI Technologies
Building on our expertise in regular smart modules, we have advanced to
high-computing-power smart modules to address applications with intensive CPU, GPU and NPU
requirements, developing technical capabilities in terms of both hardware and software:
 Hardware Technologies : Our high-computing-power smart modules deliver computing
power of 8 TOPS or more and support multiple communication protocols, including 5G,
WiFi and Gigabit Ethernet. According to Frost & Sullivan, 8 TOPS is considered as an
industry norm as the threshold for high-computing-power smart modules, enabling stable
deployment and effective commercialization in mainstream scenarios such as AI model
deployment in intelligent cockpit, and on-device generative image models for XR
devices. With continued improvements in module hardware, we have quickly adapted to
the requirements of lightweight general-purpose models and industry-specific
small-parameter models, further expanding the boundaries of high-computing-power
smart modules and providing the hardware foundation for the transition of generative AI
to on-device applications.
 Software Technologies : We recognize that software adaptation is critical for the
successful deployment of AI, as it bridges compatibility between hardware and
application scenarios. We have a dedicated team specializing in software development
for AI-related applications. Through software innovation, we have achieved:
o On-Device Deployment of AI Models : We support the deployment of various
prevailing on-device AI models, supporting their deployment and functionality at
the local device level. In 2023, we successfully ran a text-to-image generative AI
model on our high-computing-power smart modules, making us the first company
to successfully run this AI model on high-computing-power smart modules,
according to Frost & Sullivan;
o Development of AI Tools and Ecosystems : We have developed one-click conversion
and deployment toolkits to help our customers quickly deploy the AI models they
require.
This ability to achieve synergistic hardware and software development allows us to drive the
large-scale application of generative AI on device-level modules, which further enhances the
competitiveness of our products.
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5G Communication Technologies
 We have accumulated mature products and technical capabilities in innovative 5G
technologies such as 5G-A and 5G RedCap, empowering the performance and power
consumption of 5G communication, respectively, to meet diverse needs of customers;
 We have developed advanced solutions to optimize the 5G connectivity experience through
antenna design. By implementing high-gain directional antennas, we can enhance product
reception range and cellular network coverage. Our smart antenna selection algorithms further
enable optimal 5G antenna usage, improving overall product performance. Additionally, our
multi-antenna design supports a wider range of 5G dual connectivity combinations, and the
360-degree antenna distribution ensures comprehensive signal coverage;
 We continuously optimize the power efficiency of our 5G products while enhancing network
security. By combining low-power mode controls with adaptive low-power modes, we
achieve a balance between reduced power consumption and product performance. To enhance
the security of 5G network access, we have implemented measures such as secure boot
protocols and data encryption technologies;
 We also advance 5G network slicing and edge computing technologies to improve efficiency
and reliability. Our learning-based network slicing optimization platform dynamically
allocates radio and core network resources based on service types, enabling end-to-end low
latency. Combined with the real-time processing capabilities of edge computing nodes, our
solutions support localized data analysis and intelligent task scheduling, improving 5G
network utilization and service reliability.
Balanced Development Across Three Core Sectors, Driving Diversified Market Coverage
We have established a balanced and diversified market presence across three core application
sectors: general IoT, ICV and wireless broadband. The broad industry coverage not only enhances
our market influence but also mitigates the risks associated with business cycle fluctuations,
providing a solid foundation and support for our sustained growth in the wireless communication
module market.
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General IoT: Meeting Complex and Diverse Application Demands
To address the complex and diverse demands of the general IoT sector, we have designed a
range of products and solutions tailored to specific application scenarios. Notable examples
include:
 New Retail : We provide modular and customized PCBAs and end products for various
applications such as POS systems, cash registers, facial payment tablets, palm payment
devices and vending machines, offering a smart hardware infrastructure for new retail
applications;
 Industrial Applications : Our solutions include barcode scanning devices, rugged tablets,
smart walkie-talkies, intelligent video recorders and industrial AI boxes, which are
widely used in warehousing, logistics, transportation and manufacturing; and
 Healthcare : We assist customers in integrating AI technologies into new products,
including mobile nursing, telemedicine and emergency response solutions, helping them
expand into emerging markets and AI application scenarios. For example, we have
developed customized scanning and testing solutions for mobile nursing.
ICV: Driving Connectivity and Smart Applications in V ehicles
 In the ICV sector, we have emerged as one of the industry leaders through technological
innovation and strategic focus. According to Frost & Sullivan, we were the first company
globally to achieve large-scale deployment of 5G smart modules in automobiles. Traditional
in-vehicle chips often lack advanced performance capabilities, whereas our smart modules,
equipped with intelligent SoC chips, can support both 5G communication function and the
computing power needed for intelligent cockpit on a single-module level, providing
high-performance solutions that significantly enhance the in-vehicle experience.
 Leveraging our core R&D capabilities in 5G communication, Android system customization,
high-performance low-power computing and AI applications, we have developed a variety of
regular smart modules and high-computing-power smart modules tailored for the ICV sector.
These products provide intelligent cockpit solutions for various vehicle models and
automobile industry customers, and support a wide range of functions, including high-speed
5G networks, Android system customization, multi-screen functionality, driver monitoring
systems, 360-degree surround view, precise audio zone localization, continuous voice
recognition and the deployment of large AI models in vehicles.
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 We have established a solid position in the ICV sector through our innovative intelligent
cockpit solutions, which are built upon our proprietary smart module technology. Unlike
traditional cockpit domain controllers, which require separate T-BOX for vehicle
connectivity, our smart module-based domain controllers provide both communication and
computing capabilities in a single integrated solution. By incorporating 4G/5G connectivity
alongside CPU, GPU and NPU computing components, our smart modules eliminate the need
for standalone T-BOX devices, simplifying system architecture and reducing costs for
automakers.
 We were one of the earliest companies to apply smart module technology to the automotive
sector, with design and mass production experience dating back to 2019. Over the years, we
have developed mature technical solutions tailored to requirements such as vibration
resistance, high-temperature performance and operational stability.
 During the Track Record Period, we shipped over one million units of 5G smart modules for
intelligent cockpit applications, demonstrating our ability to meet the stringent quality and
reliability standards demanded by automotive customers.
 We have consistently advanced our product offerings to meet the evolving needs of the ICV
market. We have developed five generations of 5G smart modules for intelligent cockpit
applications between 2020 to 2025. During the Track Record Period, we designed,
manufactured and launched three of these products, with computing power reaching up to
nearly 30 TOPS. Our fourth-generation product, with computing power of 48 TOPS, has
already been awarded projects by leading automakers. Additionally, we are designing and
planning our fifth-generation product, which is expected to offer computing power reaching
up to nearly 60 TOPS to address future market demands. As of the Latest Practicable Date,
we were in the process of promoting our fifth-generation product to automakers.
 We have established long-term partnerships with leading global automobile manufacturers,
including certain top Chinese new energy vehicle manufacturers, to commercialize products
and solutions in the ICV sector, accelerating the development of connected and intelligent
vehicles.
 In 2024, we ranked first in the industry in terms of shipment volume of 5G in-vehicle
modules, accounting for 35.1% of the global market share.
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Wireless Broadband: Comprehensive Product Lines and Global Market Expansion
In the wireless broadband sector, we have established a comprehensive product line covering
MBB and FWA. Leveraging our comprehensive product portfolio, we continue to meet the growing
demand in the global wireless broadband market.
Our products support 5G NR Sub-6 GHz and millimeter-wave technologies that offer faster
data speeds and lower latency, cover major global frequency bands and offer mature 5G+Wi-Fi 7
system solutions. We also closely followed the industry trends and were among the first to launch
innovative module products based on 5G-A and 5G RedCap technologies. These products support
various millimeter-wave band options, catering to the needs of end markets such as North America,
Japan and Europe for mmWave band options, which supports our expansion in overseas markets.
With the technical performance, our wireless broadband products have gained broad
recognition, including from leading global operators in regions such as North America, Japan and
Europe, further consolidating our competitive advantages in the wireless broadband sector.
Expanding into Emerging Fields Through Technological Synergies
Building on our technological and product expertise in the three core areas of general IoT,
ICV and wireless broadband sectors, as well as synergistic advantages across these sectors, we are
actively exploring emerging fields. This has allowed us to further extend the application
boundaries of our products and capture additional growth opportunities. As of the Latest
Practicable Date, our high-computing-power smart modules had been used in applications such as
robots, cloud gaming servers and AR/VR glasses.
Long-Term Partnerships with Leading Global Customers, Enhancing Market Competitiveness
Driving Technological and Service Excellence with leading Global
We have established long-term and stable partnerships with leading global customers. As
market leaders in their respective fields, these customers impose stringent requirements on product
performance, service quality and technical capabilities. Meeting their high standards has
continuously driven improvements in our technological capabilities and elevated our service
standards across the industry.
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In working with these customers, we not only meet their demanding technical requirements
but also deliver customized solutions that address complex and diverse application scenarios.
Through these collaborations, we have accumulated technical expertise and project management
experience, which helps us to enhance our efficiency and capabilities in serving other top-tier
customers while significantly strengthening customer loyalty. For example, we assisted a leading
domestic mapping company in developing a high-end dashcam product. The project progressed
from initiation to mass production in under five months. During the project, we engaged in
frequent communication with the customer to minimize misunderstandings of requirements,
actively adjusted development plans to respond promptly to changing requirements and conducted
comprehensive risk assessments before project commencement to identify and address potential
issues at early stage.
We are driven by customer needs and business opportunities and focus on identifying
innovation opportunities from business models and application scenarios. We provide end-to-end
development of products and solutions tailored to customer requirements. For instance, we assisted
a leading domestic new energy vehicle manufacturer in enabling multi-camera support using a
specific SoC chip model. Although the chip model was not originally designed to support the
multi-camera functionality, we conducted an in-depth analysis of the chip’s capabilities and
software debugging feasibility and worked closely with the chip provider and concluded that the
chip model could support multi-camera functionality and successfully developed a solution that
enabled this feature, helping the customer achieve a key technical breakthrough. Our technical
support and innovation capability not only met the customer’s customized needs but also
significantly enhanced our customer retention and market competitiveness.
Dedicated Teams Supporting Collaboration with Key Customers and Building Long-Term Trust
We place significant emphasis on team collaboration to ensure we meet the high standards of
technical and service requirements demanded by key customers. Our R&D, sales and customer
service teams possess understanding of customer needs, which allows them to respond quickly to
customized requirements and ensure high-quality delivery of products and services.
Additionally, our team collaboration capability to manage complex projects has continuously
improved, allowing us to efficiently coordinate and execute projects with tight delivery timelines
or complex technical demands from key customers. This team collaboration capability has not only
fostered trust from our key customers but also provided robust support for our long-term
competitiveness and market position in the industry.
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Pragmatic and Solid Corporate Culture, Visionary Management Team and Diverse Talent
Pool Supporting Sustainable Development
Pragmatic and Solid Corporate Culture Driving Technological and Product Innovation
We uphold a pragmatic and solid corporate culture that is led by engineers and driven by
technology, impressing customers through technology and products. This culture underpins every
stage of our development and drives the continuous innovation of our technologies and products.
Our business philosophy prioritizes product quality and long-term accumulation of
technological capabilities, ensuring that each product and technology meaningfully addresses
customer challenges and delivers high-value market applications.
Visionary and Experienced Management Team
Our management team is comprised of individuals with diverse industry backgrounds and
practical experience. They possess insight into the development trends of the wireless
communication module industry and demonstrate insightful strategic vision.
The majority of our management team members have R&D or technical backgrounds, with
most having over 10 years of experience in the wireless communication industry, with some having
nearly 20 years of experience. Several core management and R&D personnel have held positions at
prominent large communication companies. Their profound understanding of R&D and technology
helps us efficiently accomplish intended R&D outcomes and ensures the timely commercialization
of products. In addition, the management team has strategically guided us to achieve continuous
product upgrade and downstream application expansion. Their strategic vision has allowed us to
maintain a solid position in an evolving industry.
Diverse Talent Pool Supporting Long-Term and Stable Development
Our workforce is predominantly composed of R&D personnel, with the core team possessing
experience in data transmission modules, regular smart modules and high-computing-power smart
modules. This talent structure provides a firm foundation for technological innovation and product
development.
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We focus on attracting top talent from the industry and ensure long-term retention through
incentive mechanisms and a culture of innovation. Additionally, we have established a
comprehensive talent development system, which includes on-the-job training, project-based
learning and technical knowledge sharing. This system not only enhances employee technical
capability and industry perspective but also supports our long-term and stable development and
enhances our talent pool.
OUR STRATEGIES
Continue Investing in Technology R&D to Drive Product Iteration and Industry Expansion
Improve the Product Portfolio in Existing Markets
 We plan to further advance the technological capabilities of our 5G data transmission
modules and smart modules to better meet the demand for new technologies and products
from key customers, such as those in the ICV and overseas operators. To achieve this, we are
actively advancing the development of cost-efficient 5G-RedCap modules to meet the
growing demand for 5G transmission products with competitive pricing. Additionally, we are
developing modules and mobile broadband products that support millimeter wave technology
to address specific markets, such as Australia, Thailand, India and Finland, which widely
adopt millimeter wave technology.
 In overseas markets, the demand for regular smart modules and high-computing-power smart
modules remains underdeveloped. We intend to address this gap by offering a more
comprehensive portfolio of smart module products to better meet the needs of overseas
customers for smart applications. For example, we plan to introduce smart module products
with a wide range of computing powers covering mid-to-high-end markets. We also aim to
provide flexible operating system options, including support for various Android versions and
dual-system solutions (such as Android and Windows) to enhance product adaptability.
Furthermore, we plan to launch customized modules and solutions for the following overseas
markets: (i) consumer IoT sector, such as AR glasses, AI glasses, AI audio recording devices,
AI translation devices and wearable products; (ii) machine vision sector, such as customized
dash cameras for taxis, as well as AI BOX products applied in AI retail cabinets and
unmanned retail stores; and (iii) automotive intelligent cockpit sector, such as intelligent
cockpits for electric vehicles, Robotaxi and autonomous delivery vehicles. We plan to provide
customized modules, PCBA mainboards or complete terminal products in accordance with
customers’ specific requirements. On the software side, we can also offer customized Android
operating systems and device drivers tailored to specific components, such as displays and
cameras, based on customers’ needs. We also aim to enhance our capabilities in AI
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deployment by offering customers with AI toolkits that simplify the software environment
setup process, thus reducing development costs and providing customers with deployment and
adaptation services for on-device AI models for diverse scenarios and external devices.
 We plan to build a more robust and flexible sales network by attracting more quality
customers in ICV , general IoT and mobile broadband and other sectors to further diversify
our customer base and provide our wireless communication module products to them.
Strengthen R&D Efforts in On-Device AI to Capture Emerging Industry Growth Opportunities
We aim to enhance the software of our high-computing-power smart modules to support
various AI algorithms, on-device models and other on-device AI technologies. By integrating
on-device AI capabilities, we seek to unlock the value of our high-computing-power smart modules
in emerging industries such as embodied intelligent robots, AI servers and on-device AI hardware.
Pursue Foundational and Innovative Technology Research
We strive to maintain a competitive edge in the development of industry technologies through
sustained investment in foundational and innovative research. This approach is intended to secure
our long-term technological leadership and lay the groundwork for future innovation and
commercialization. Key areas of research include preliminary research into 6G communication
technology and product design, interconnectivity and networking between computing chips with
complex architecture, integrated storage and computing technologies and on-device AI agent
applications.
Build and Strengthen Global Sales and Supply Chain Networks to Accelerate International
Expansion
 Global Sales Network Expansion : We plan to enhance our global sales network by recruiting
additional personnel for our sales, marketing and customer service teams the construction of a
global sales network, and expanding our coverage of overseas markets. Through increased
sales efforts and product exports and development of customized products with our global
customers, we strive to grow our market share in international markets; In particular, we plan
to strengthen our overseas sales team by recruiting additional foreign sales personnel,
expanding the number of overseas distributors and, through consultation with industry
consultants, to identify and engage potential customers in key international markets. We have
formed a joint venture company (the “ JVC”) in Japan named MeiLink Co., Ltd. (ٟ
MeiLink), and an associate in the U.S. named Sigbeat Inc. to accelerate local market
penetration, and may continue to do so in new overseas markets as appropriate. MeiLink Co.,
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Ltd. was incorporated to sell, marketing and promote our products in Japan, utilizing our
strengths in production and technologies. Salient terms of the joint venture agreement (the
“JV A”) include:
 Forming of the JVC: The joint venture partners (namely Zhongge Shanghai and Meiko
Electronics Co., Ltd., a company duly organized and existing under the laws of Japan,
collectively, the “ JVP”) shall make capital contributions to the JVC in accordance with
their respective shareholding ratios of 50% and 50%.
 Roles and Responsibilities of Parties: The JVP shall provide services to the JVC
pursuant to the JV A. Specifically:
 Meiko Electronics Co., Ltd. shall provide to the JVC support for sales of the
products by utilizing its sales network in Japan and back-office support services,
such as services related to accounting, legal and IT management; and
 Zhongge Shanghai shall provide to the JVC the products and technical or other
information on the products reasonably necessary for their sales in Japan, and
provide to the JVC’s customer with technical support upon request by Meiko
Electronics Co., Ltd. or the JVC.
 Termination: The JV A may be terminated upon the fulfillment of specified terms and
conditions as stipulated therein. For example, the JVC shall terminate upon mutual
written agreement by the JVP. Certain major clauses, such as clauses of interpretation,
indemnification and confidentiality, shall survive the termination of the JV A.
 Global Supply Chain System Strengthening to Support International Customers :W e
aim to consolidate relationships with our existing supply chain partners and also
actively expand our global supply chain resources of raw material suppliers, EMS
providers and logistics service providers. Through these efforts, we intend to optimize
the stability and resilience of our supply chain, ensuring robust support for our global
business growth. Our supply chain management team actively manage our raw material
suppliers, logistics providers and EMS partners in order to build a resilient and stable
supply chain to support our operations. Additionally, we are actively identifying EMS
partners in certain countries, such as Vietnam, Thailand, Malaysia and Japan, to
diversify our supply chain and enhance regional capabilities for raw material supply and
product distribution. As of the Latest Practicable Date, two of our EMS partners in
Vietnam had commenced manufacturing for us. In addition, we had entered into
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agreements with certain EMS partners in Malaysia, Thailand and Brazil to facilitate
preliminary technical discussions and due diligence. As of the Latest Practicable Date,
no manufacturing agreement had been entered into between these EMS partners and us.
Expand Along the Industry Value Chain and Pursue Strategic Mergers and Acquisitions to
Create New Growth Opportunities
We intend to prudently pursue vertical expansion along the industry value chain and
undertake strategic investments or acquisitions in areas such as 5G wireless communication,
on-device AI, automotive technology and robotics. Through these efforts, we aim to enhance our
comprehensive in-house R&D capabilities, increase the value of our products within the industry
value chain, and diversify our product offerings and customer base.
OUR PRODUCTS AND SOLUTIONS
Overview
We have a diverse and comprehensive portfolio of wireless communication modules and
solutions to satisfy the needs under various application sectors. During the Track Record Period,
we primarily generated revenue from the sales of wireless communication modules and solutions,
including (i) smart modules and solutions, which include (a) regular smart modules and solutions
and (b) high-computing-power smart modules and solutions; and (ii) data transmission modules
and solutions.
The following table sets forth a summarized comparison of our modules.
Product Key features and functions Key components
(i) Smart module:
(a) Regular smart module ..  Equipped with smart operating systems
such as Android;
 Supports features such as multi-media,
multi-camera and multi-display; and
 Computing capability at lower than 8
TOPS(1)
 SoC;
 Memory chip
(3);
 Radio frequency chip (4);
 PCB (5); and
 Power management chip (6)
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Product Key features and functions Key components
(b) High-computing-power
smart module ........
 Equipped with smart operating systems
such as Android;
 More suitable for deployment of advanced
AI models (especially on local devices)
that require high computing power and
large memory ; and
 Computing capability at equal to or higher
than 8 TOPS
 SoC with stronger NPU and AI
acceleration performance;
 Memory chip;
 Radio frequency chip;
 PCB; and
 Power management chip
(ii) Data transmission
module: ...........
 Cellular wireless connection from 2G to
5G
(2);
 Not equipped with smart operating systems
like Android; and
 No high computing power capability, and
typically not selected for their computing
power capability
 Baseband chip
(7);
 Memory chip;
 Radio frequency chip;
 PCB; and
 Power management chip
Notes:
(1) According to Frost & Sullivan, 8 TOPS is considered as an industry norm as the threshold for
high-computing-power smart modules, enabling stable deployment and effective commercialization in mainstream
scenarios such as AI model deployment in intelligent cockpit, and on-device generative image models for extended
reality devices.
(2) Data transmission modules have cellular wireless communication capability, while smart modules may or may not
have cellular wireless communication capability.
(3) Memory chip stores data and software program instructions required for module operations.
(4) Radio frequency chip converts digital signals to radio frequency signals and vice versa for wireless communication.
(5) PCB serves as the physical platform with electrical connections for integrating and supporting electronic
components in a module or device in electronic devices.
(6) Power management chip regulates and distributes power efficiently to ensure stable and optimal operation of the
module’s components.
(7) Baseband chip processes and manages digital signals for communication protocols and data transmission.
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We also provide our customers with solutions built based on our module products and/or
module technologies. Our solutions are typically provided in the forms of (i) PCBAs, which are
fully assembled circuit boards that typically integrate (a) firmware or embedded software for
specific functions and (b) electronic components such as chips and modules; (ii) end products,
which are ready-to-use products embedding PCBAs, such as handheld devices and (iii) services,
which primarily include research and development services based on our module technologies
catered to the needs of our customers. Both PCBAs and end products are customized solutions
formed by integrating additional software and hardware based on our modules, tailored to the
specific requirements of our customers.
Our products are designed with a high degree of customization to ensure integration with
end-product components and systems. Our customization efforts include, for instance:
 Hardware Customization : Tailoring interfaces and circuit designs to ensure the
realization of specific requirements of customers and applications.
 Software Development : Adapting operating systems, developing drivers and
implementing application-specific logic to ensure compatibility with customer systems
and platforms.
 Production : Making sure the manufacturing processes satisfy industry-specific
requirements, such as automotive-grade standards.
These customization capabilities allow us to deliver integrated, high-performance solutions
tailored to diverse customer needs. They represent value-add beyond the provision of hardware, as
they are highly integrated offerings that combine our module with a substantial layer of
customized software, hardware and application-specific R&D services. By delivering a functional
subsystem or a ready-to-use end product, rather than just a standalone component, we solve
complex integration challenges for our customers, significantly reducing their development cycles
and technical risks, thereby accelerating their time-to-market.
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The following table sets forth a breakdown of our revenue by module and solution type
during the Track Record Period.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Modules and solutions ........ 2,227,999 96.6 2,048,987 95.4 2,808,563 95.5 2,085,672 95.6 2,738,538 97.1
(i) Smart modules and solutions ... 957,351 41.5 1,218,424 56.7 1,850,696 62.9 1,394,068 63.9 1,865,127 66.1
(a) Regular smart modules and
solutions ........... 922,296 40.0 898,167 41.8 832,578 28.3 751,591 34.5 899,984 31.9
(b) High-computing-power smart
modules and solutions ... 35,055 1.5 320,257 14.9 1,018,118 34.6 642,477 29.4 965,143 34.2
(ii) Data transmission modules and
solutions ............. 1,270,648 55.1 830,563 38.7 957,867 32.6 691,604 31.7 873,411 31.0
Others (1) ................ 77,933 3.4 98,349 4.6 132,811 4.5 96,356 4.4 82,750 2.9
Total .................. 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Note:
(1) Primarily including sales of electronic components.
Smart Modules and Solutions
Smart modules are modules with data transmission capabilities, processing units including
CPU and GPU, memory units, integrated DDR and integrated Wi-Fi and Bluetooth units. Unlike
data transmission modules, our smart modules can be equipped with smart operating systems, run
applications locally, process data on the edge and connect with sensors, cameras and displays.
These capabilities make smart modules ideal for intelligent connected devices such as ICV .
We provide two types of smart modules and solutions: (i) regular smart modules and
solutions; and (ii) high-computing-power smart modules and solutions.
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Regular Smart Modules and Solutions
Our regular smart modules support (i) smart operating systems including Android, which
enables complex controls and allows customization or modification by end customers in
accordance with their needs; (ii) a wide range of interfaces, which further enable multimedia
features such as multi-camera and multi-display input, as well as high-definition audio and video
recording and playback; (iii) high-capacity storage; and (iv) various connectivity standards, which
may include cellular wireless connection, Wi-Fi and Bluetooth. Our regular smart modules are
primarily valued for their smart operating system integration and ability to support various
interfaces to support multimedia, and they are not typically selected for their computing power
because their computing power is less than 8 TOPS. The following picture illustrates one of our
regular smart module products:
Our regular smart modules have the following key features:
 Customization : Our regular smart modules are embedded with operating systems that
support the execution of customized software applications on local devices.
 Multimedia Capabilities : Our regular smart modules support multimedia features such as
high-resolution streaming, 3D rendering, multi-camera, multi-display and interactive
display. Built on SoCs, our regular smart modules deliver powerful multimedia
processing with optimize latency and power consumption.
 Connectivity : Our smart modules support a wide range of high-speed connectivity
standards, which may include 4G and 5G, facilitating robust and adaptable network
performance across diverse deployment scenarios.
We also provide solutions based on our regular smart modules. The below case study
illustrates one of these solutions we launched during the Track Record Period.
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Case Study: Our 5G + Wi-Fi 7 Smart Handheld Device Solution
Application sector: General IoT
Application scenarios: Production facilities, warehousing, retail and hospital, among others
Features:  5G cellular wireless communication and Wi-Fi 7 transmission
technology;
 High-frequency radio-frequency identification technology;
 Equipped with a scanning engine for scanning of QR codes or
barcodes to quickly retrieve, upload, and process information;
 Accurate and real-time data transmission that enhances inventory
efficiency and management;
 Enhanced water and dust resistance; and
 6 TOPS on-device computing power
The following picture illustrates our 5G + Wi-Fi 7 smart handheld device solution:
our module
High-Computing-Power Smart Modules and Solutions
Our high-computing-power smart modules feature (i) SoC with stronger AI accelerators such
as NPU than regular smart modules; and (ii) high-speed memory, which enable data-intensive,
low-latency and real-time processing at the edge in applications with specific performance needs.
The CPU and NPU on our high-computing-power smart modules enhance the processing
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capabilities, such as optimized parallel computation and multimedia rendering. AI accelerators like
NPUs increases the efficiency of algorithms required for AI and machine learning. High-speed
memory improves real-time processing and data throughput.
We design our high-computing-power smart modules to provide computing power equal to or
higher than 8 TOPS. These modules can enable the deployment and operation of generative AI
applications on local devices. It may also support multiple communication standards including 5G,
Wi-Fi or gigabit ethernet. Our high-computing-power smart modules can be broadly applied in
robotics, servers, AI retail, cloud gaming, AR/VR and industrial visual inspection. The following
picture illustrates one of our high-computing-power smart module products:
Our high-computing-power smart modules have the following key features:
 High Computing Power : Our high-computing-power smart modules utilize the
computing power of CPU, GPU and NPU units in advanced SoC to run data-intensive
tasks such as facial recognition, real-time video analytics and natural language
processing on local devices. These capabilities make our high-computing-power smart
modules ideal for applications that require on-device accelerated data-processing
without reliance on cloud access. As of the Latest Practicable Date, we had launched
high-computing-power smart modules that had computing capability of up to 100 TOPS.
 Support of Generative AI Models : Our high-computing-power smart modules are able to
support the deployment and operation of on-device versions of various prevailing AI
models. Our high-computing-power smart modules feature (i) multiple smart operating
systems such as Android; (ii) built-in tools such as platforms that facilitate
programming, packaging and deploying applications; and (iii) compatibility with
common open-source machine learning and deep learning AI frameworks that help
developers and researchers build, train and run AI models. This versatility affords our
customers with flexibility to build custom smart applications using our
high-computing-power smart modules to reduce time and development cost.
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We also provide solutions based on our high-computing-power smart modules. The below
case study illustrates one of these solutions we launched during the Track Record Period.
Case Study: AIMO Pro — A Personalized Portable Computing Platform with up to 48 TOPS
Computing Power
Application sector: General IoT
Application scenarios: Office, home, school and new retail, among others
Features:  A personalized computing platform;
 48 TOPS computing power;
 Can support the deployment and operation of on-device versions
of prevailing AI models;
 Local data processing to offer data protection and privacy during
data transmission;
 High-frequency radio-frequency identification technology; and
 Compact size for easy deployment
The following picture illustrates our AIMO Pro:
our module
As of the Latest Practicable Date, our AIMO Pro product was in the market promotion phase
and had not entered into mass production phase.
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Data Transmission Modules and Solutions
Data transmission modules are integrated hardware that transfer data between devices and
systems by sending and receiving information over various types of networks. By providing secure
and efficient data exchange across networks, data transmission modules enable (i) real-time data
transmission; and (ii) secure data transfer. The following picture illustrates one of our data
transmission module products:
Our data transmission modules have the following key features:
 High performance : Our data transmission modules support high-speed download and
upload, and high-bandwidth applications that require rapid transfer of large volumes of
data with low latency and high reliability. For instance, our data transmission module
provide the bandwidth that are compatible with the networks of multiple carriers to
improve network capacity and user experience.
 Power efficiency : Based on our independently developed power efficiency control
technology and adaptive low-power-mode design, our data transmission modules can
transfer large volumes of data with low power consumption. This power efficiency
feature enhances the performance, capacity and compatibility of IoT devices in the
general IoT sector where our data transmission modules are applied.
 Broad compatibility : Telecom companies may use different frequency bands,
communication standards and testing protocols of their 4G and 5G networks. These
differences pose challenges for module product compatibility in different markets. We
designed our data transmission modules such that they support a broad range of
frequency bands, communication standards and testing protocols to ensure stable and
reliable performance across diverse networks and effectively overcome frequency
limitations.
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We also provide solutions based on our data transmission modules. The below case study
illustrates one of these solutions we launched during the Track Record Period.
Case Study: Our 5G-A mmWave Mobile Wi-Fi Solution
Application sector: Wireless broadband
Application scenarios: Office meetings, outdoor streaming and emergency communication,
among others
Features:  Accelerates 5G-A terminal adoption across diverse network
scenarios;
 Peak download speeds at 10Gbps with Sub-6 and mmWave
frequency; and
 Advanced thermal management, optimized antenna design and
intelligent power-saving mechanisms
The following picture illustrates one of our 5G-A mmWave Mobile Wi-Fi solutions:
Others
During the Track Record Period, besides sales of wireless communication modules and
solutions and to a much lesser extent, we generated revenue from other activities such as sales of
electronic components, examples of which included baseband chips and radio frequency chips, to
electronic component distributors.
INDUSTRY STANDARDS FOR WIRELESS COMMUNICATION MODULES
Performances of our wireless communication modules are assessed from multiple factors and
metrics, depending on their specific functions and intended uses. According to Frost & Sullivan,
the performance of our wireless communication modules is evaluated based on a set of technical
indicators, which vary depending on the specific functionalities and intended application scenarios
of each product. These indicators are largely derived from specifications issued by globally
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recognized standard-setting organizations such as 3GPP. It is an industry-wide practice for module
manufacturers to develop and disclose product performance in accordance to these indicators.
During the Track Record Period, we complied with these industry standards in the design and
development of our products in all material respects.
 Data Transmission Modules: the main indicators include network standard
compatibility, power consumption, transmission speed and reception sensitivity.
 Regular Smart modules: the main indicators include CPU architecture, memory
configuration, video encoding/decoding capabilities and operating system support.
 High-computing-power smart modules: the main indicators include computing power
(number of TOPS) and power efficiency.
APPLICATION OF OUR PRODUCTS AND SOLUTIONS
Our products and solutions are widely used across various applications sectors, including (i)
general IoT; (ii) ICV; and (iii) wireless broadband, as illustrated in the table below.
Application Sector Key Application Scenario
General IoT ...............  Smart retail devices (1)
 Logistics (2)
 Sharing economy (3)
 Consumer IoT (4)
 Industrial IoT (5)
 Other emerging application scenarios (6)
ICV .....................  T-Box
 Intelligent cockpit
Wireless broadband .........  4G and 5G FWA (7)
 MBB (8)
Notes:
(1) Including products such as POS machines and checkout machines.
(2) Including products such as 5G code-scanner smart PDA and cold chain logistics smart handheld PDA.
(3) Including products such as shared bikes and shared scooters.
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(4) Including products such as video conference tablets, dashcams, DMS, smart medical monitors and 5G streaming
devices.
(5) Including products such as industrial routers, industrial AI box and 5G video monitors.
(6) Including products such as AR/VR glasses and array AI servers.
(7) Including products such as CPE.
(8) Including products such as Mi-Fi and wireless network adapters.
The following table sets forth a breakdown of our revenue generated in terms of application
sector during the Track Record Period.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
General IoT ............. 1,004,868 43.6 970,963 45.2 1,050,531 35.7 924,712 42.4 1,156,204 41.0
ICV ................. 342,173 14.8 593,629 27.6 1,220,869 41.5 788,318 36.1 986,903 35.0
Wireless broadband .......... 880,957 38.2 484,395 22.6 537,164 18.3 372,642 17.1 595,431 21.1
Others (1) ............... 77,933 3.4 98,349 4.6 132,811 4.5 96,356 4.4 82,750 2.9
Total ................ 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Note:
(1) Primarily including sales of electronic components.
We experienced significant growth in revenue in the ICV sector during the Track Record
Period, primarily attributable to an increase in the sales volume of our smart modules and
solutions used in ICV as a result of increase in demand for these modules and solutions from
downstream customers. However, there is no assurance that the growth in demand for our ICV
products and solutions, or our revenue from this sector, will continue at a similar rate or at all in
the future. The ICV market is subject to rapid technological changes, evolving industry standards
and intense competition. Factors such as a slowdown in the adoption of NEVs, changes in
government subsidies or regulations, shifts in consumer preferences, or increased competition
among automakers could lead to a slowdown or decline in demand for our products. Please see
“Risk Factors — Risks relating to our business and industry — We experienced significant growth
in revenue in the ICV sector during the Track Record Period. We may not be able to achieve the
same level of growth in the ICV sector, and any adverse developments in the ICV sector could
materially and adversely affect our business, financial condition, and results of operations” for
details.
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The table below illustrates certain key applications of our products and solutions and their
features in the respective applications:
Application Sector Application Scenario Features of our Products and Solutions
Examples of End Products
that uses our Products and
Solutions
General IoT ...... Smart retail devices We tailor our facial recognition payment
solution for the application in POS
machines in the smart retail sector. For
instance, our smart POS machines feature
an Android-based facial payment terminal
and integrates multiple payment methods
— including QR code scanning, facial
recognition and card-based payments — to
enable real-time settlements in mobile
payment scenarios. We also offer
customization services tailored to the
encryption needs of our customers to
ensure secure and efficient payment
solutions.
POS machines
Logistics We offer customized products and solutions
used in logistics. For instance, our 5G
code-scanner smart PDA solutions feature
global 4G and 5G connectivity and support
Bluetooth, GPS, Wi-Fi and NFC. The 5G
code-scanner smart PDA solutions integrate
barcode scanning engines from
industry-leading code-scanning engine
providers with industrial-grade standards,
including water resistance and 1.5-meter
drop resistance.
5G code-scanner smart
PDA solutions for
logistics and
warehouses
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Application Sector Application Scenario Features of our Products and Solutions
Examples of End Products
that uses our Products and
Solutions
Industrial IoT We offer products and solutions that meet the
demand under industrial-grade applications.
For instance, our industrial AI box solution
supports quality checks at production
facilities. Our industrial AI box solution
has up to 48 TOPS of computing power,
automotive-grade technology and a variety
of hardware interfaces to provide
long-distance, low-latency and
high-precision video transmission to
support quality checks and oversight at
production facilities.
Industrial AI box for
quality checks and
production facility
oversight
ICV ........... Intelligent cockpit Leveraging advanced wireless communication
technologies, high computing power and
multi-screen connectivity capabilities, our
products and solutions support features
such as real-time navigation, in-cabin
entertainment and safety monitoring, which
allows personalized user experiences
through natural language processing,
multi-camera systems, and AI-enhanced
services. Our products and solutions help
automotive manufacturers and Tier-1
suppliers accelerate the development of
intelligent cockpits.
Intelligent cockpit
with various
functions such as
real-time navigation,
in-cabin
entertainment and
safety monitoring
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Application Sector Application Scenario Features of our Products and Solutions
Examples of End Products
that uses our Products and
Solutions
T-Box Our products and solutions are widely used in
automotive T-Boxes to enable smart
monitoring of vehicle status and driving
environments by collecting real-time data
from the vehicle’s internal systems, sensors
and cameras. This allows for early fault
detection, driver behavior analysis and
safety warnings. Additionally, our solutions
support centralized remote management,
enabling efficient updates, diagnostics and
maintenance to improve operational
reliability. Our products and solutions for
T-Boxes solutions are designed with secure
system startup features to ensure only
authorized software is executed. Advanced
encryption and secure data storage
technologies protect sensitive information
and ensure compliance with automotive
safety regulations.
T-Box for vehicle fault
detection, driver
behavior analysis
and safety warnings
Wireless broadband . 4G and 5G FWA We offer products and solutions that support
high-speed broadband connectivity by
delivering wireless internet access over
cellular networks, a flexible alternative to
traditional wired infrastructure. For
instance, our CPE devices serve as fixed
network hubs that converts signals into
Wi-Fi 6 or Wi-Fi 7 through built-in router
modules to provide full internet coverage
for smart home devices. Equipped with
antennas that operate at multiple frequency
bands compatible with domestic and
industrial uses and traffic management
technologies, our CPE devices provide
high-speed, low-latency and stable internet
connection.
Mobile WiFi terminals
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In addition, we invest in research and development to expand the application sectors of our
modules and solutions. We have developed modules and solutions in various scenarios such as:
 a module that incorporated the SoC by a leading technology company. The module
could be used for the control, sensing, decision-making and speech interaction of robots;
and
 modules used for the provision of computing power for the AR glasses of a renowned
AR glass provider.
The following sets forth selected examples of how our modules function in certain
applications scenarios and interact with other components in an end-product or system:
Case Study 1: POS Machine (General IoT)
Our smart modules serve as the core processing and communication component in POS
machines by integrating multiple functions critical to their operation:
 Functions Provided by Our Module :
— Network Connectivity : The module integrates 4G/5G baseband chips, enabling the
POS machine to connect to cellular networks for secure real-time transaction
processing and transaction data transmission.
— System Support : The module provides the underlying smart operating system
environment, allowing the POS machine to run payment applications and other
business software on the system.
— Multimedia Processing : The module controls key peripherals of the POS machine,
such as touchscreens, cameras and barcode scanners, enabling functionalities like
screen display, interactive touch operations and QR code scanning.
— Secure Payment Processing : The module acts as a gateway for encrypted
transmission of transaction data to payment systems, ensuring compliance with
security standards.
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 Functions of Other Components : In the POS machine, besides our module, there are
also other components such as security chips or peripheral controllers. For example:
— Security Chips : These are specialized components designed for storing encryption
keys and executing cryptographic algorithms but lack general processing
capabilities. The smart module works with these chips by transmitting encrypted
transaction data securely.
— Peripheral Controllers (such as MCU) : These components handle specific tasks
like connecting with the cash drawer or printer but are limited to low-power,
real-time operations and do not have strong computing power.
— Specialized Interface Chips (such as Card Reader Chips): These chips are designed
to handle specific physical layer protocols and signal processing tasks, such as
NFC, magnetic stripe or IC card interactions. They typically include limited logic
or a basic MCU to process low-level interface protocols. Our smart module
retrieves the processed card data from these chips through standard interfaces and
coordinates subsequent operations.
 Integration of Our Module with Other Components : Our smart module integrates with
other components of the POS machine via industry-standard interfaces to enable
communication and data exchange. For example, it interacts with security chips for data
encryption, controls the touchscreen via a standard interface and processes data from
barcode scanners via standard protocols.
Case Study 2: Intelligent Cockpit (ICV)
Our high-computing-power smart modules are the core processing units in intelligent
cockpits, handling complex data processing and enabling advanced interactive features.
 Functions Provided by Our Module :
— High-Performance Computing : The module integrates a high-performance SoC
with CPU, GPU, and NPU/AI engines to support real-time, resource-intensive tasks
such as 3D rendering, driver monitoring and natural language processing.
— Integrated Connectivity : It includes 4G/5G and Wi-Fi capabilities to ensure
communication between the vehicle and external networks.
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— AI and Multimedia Processing : The module processes data from multiple sensors
(for example, cameras and microphones) and provides AI-driven functionalities,
such as:
 Multi-Screen Display: The module is capable of driving multiple
high-definition screens in the cockpit. It supports smooth rendering of
navigation systems, 3D vehicle models and video streaming.
 Sensor Data Processing: It processes data from multiple inputs, such as
driver-monitoring cameras, gesture recognition systems, surround-view
cameras, microphones and radar signals, to provide comprehensive situational
awareness and intent detection.
 Natural Language Assistant: The computing power of the module supports
advanced voice assistants capable of understanding complex commands and
maintaining context-aware conversations.
 Smart Services: Through the support of the module, the intelligent cockpit
generates actionable suggestions based on user habits and real-time contexts,
such as adjusting navigation routes.
 AI-Powered Image Processing: The module enhances the visual experience by
rendering real-time road conditions, creating virtual assistant avatars or
optimizing low-light images for better clarity.
 Functions of Other Components : Examples of other components in an intelligent
cockpit include:
— Video Serializer/Deserializer Chips : These chips handle raw video signal
transmission from cameras but lack the computational power to process or analyze
the data. The smart module processes camera data instead.
— Audio Chips : While audio coding/decoding chips process raw sound signals, the
smart module integrates these outputs with AI-driven voice recognition and
enhancement features.
 Integration with Other Components : Our module connects with cameras, displays and
sensors through industry-standard interfaces. It also connects with in-vehicle networks
through commonly used protocols to ensure data exchange with other vehicle systems.
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Case Study 3: Mobile WiFi Terminals (Mobile Broadband)
Mobile WiFi terminals are a type of wireless broadband product designed to provide
high-speed internet access by converting 4G/5G network signals into WiFi signals. These devices
are commonly used in scenarios such as international travel, where users use mobile WiFi
terminals to connect their smartphones, PCs or other devices to the internet via WiFi.
 Functions Provided by Our Module:
— Communication : our data transmission module acts as the central component of the
mobile WiFi terminal, enabling connectivity to 4G/5G networks provided by
telecommunication operators.
— Signal Conversion and Management : our module facilitates the reception of 4G/5G
signals from the telecom network and ensures stable transmission to the device’s
WiFi chip for further processing.
— Power Optimization : our module’s integrated power management system ensures
efficient energy use, extending battery life while maintaining stable connectivity.
 Functions of Other Components : other components in the mobile WiFi terminal
include:
— WiFi Chip : the WiFi chip converts the 4G/5G signals received by the
communication module into WiFi signals, enabling other devices, such as
smartphones and PCs, to connect to the internet.
— Antenna : the antenna is responsible for transmitting and receiving wireless signals.
It ensures reliable signal reception and transmission while enhancing the strength
and quality of the communication signals.
— SIM Card : the SIM card provides authentication for accessing telecommunication
operators’ networks.
 Integration of Our Module with Other Components : Our data transmission module
integrates with the other components of the Mobile WiFi terminal through
industry-standard interfaces and protocols, enabling data transmission and device
functionality. This integration allows the Mobile WiFi terminal to deliver high-speed,
low-latency and stable internet access.
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BUSINESS MODEL
Under our business model, we focus on the R&D and design of our modules and solutions
and we outsource the manufacturing to third-party EMS providers. According to Frost & Sullivan,
it is in line with the industry practices in the wireless communication module industry in China to
outsource manufacturing to EMS providers.
The following diagram illustrates our business model:
Our Suppliers
Raw material
suppliers EMS providers
Our Group
Direct sales
customers Distributors
Our Customers
3. Finished products(2)
2. Raw materials(1)
Product, raw materials and manufacturing specifications flow
Fund flow
Third parties
1. Manufacturing specifications
Notes:
(1) During the Track Record Period, our raw material suppliers directly provided raw materials to our EMS providers.
Our raw material suppliers may arrange the shipments of the raw materials.
(2) During the Track Record Period, our finished products were generally delivered directly from EMS providers to
locations designated by our customers.
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Overview of the Industry Value Chain
The following diagram illustrates the industry value chain in which we operate:
Raw material
suppliers
Us
(and EMS
providers
engaged by us)
End customers
Upstream Midstream Downstream
Upstream: Raw Material Suppliers
Upstream suppliers primarily provide key components and raw materials essential for the
design and manufacture of wireless communication modules. These suppliers include:
 Chip Providers : Provide chips such as (i) baseband chips; (ii) radio frequency chips;
(iii) memory chips; (iv) SoCs, which serve as the core communication and processing
units of our wireless communication modules.
 PCB and Other Component Providers : Supply PCBs and structural components based on
our detailed product specifications.
Upstream raw material suppliers also provide technical support for the materials they supply,
allowing us to integrate these into our module designs effectively.
Midstream: Us (and EMS Providers Engaged by Us)
We play a crucial role in the midstream segment by designing, developing and manufacturing
wireless communication modules. Through the combination of hardware support and software
configuration, our modules provide network connectivity, smart functions and/or high-computing
power for end customers. These functionalities reduce the R&D burden for downstream end
customers, allowing them to focus on designing and manufacturing their own end products without
having to develop foundational technologies such as wireless communication, hardware computing
power and software configuration. Our primary contribution within the value chain includes:
 Module Design and Development : We design and develop various wireless
communication modules to meet the demand and requirement of end customers. The
design and development process involves:
o Designing hardware architecture to integrate chips, PCBs and other components
into fully functional modules, ensuring compatibility and performance.
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o Developing and testing firmware and software to enable core module
functionalities. Throughout this process, we work closely with end customers to
provide tailored module solutions that meet specific technical and operational
requirements, catering to diverse applications across industries.
o Optimizing the modules for performance, reliability, and compatibility with
downstream applications.
 Enabling the Core Functionalities of Our Modules : The primary functions of our
modules include:
o Enabling devices to connect to cellular networks, Wi-Fi or other connection
methods.
o Supporting connections to external devices such as cameras, displays and scanners
through module-level interfaces. During our design process, we deploy and
configure the interfaces in a tailored manner so that end customers can easily
connect their external devices without the tedious configuration processes.
o Providing operating environments including smart operating systems (such as
Android) and the software and hardware support for high-computing power
applications such as AI models. Although we do not self-develop the algorithms to
be run for applications such as AI models, our products allow end customers to
conveniently deploy and run their own algorithms directly on the modules.
 Manufacturing and Testing : We outsource the manufacturing of our modules to EMS
providers. EMS providers produce and test the modules in accordance with our detailed
manufacturing specifications and quality requirements. We oversee rigorous testing and
validation processes, ensuring that the modules meet customer specifications and
industry standards.
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Downstream: End Customers
Downstream end customers include a range of manufacturers that integrate our wireless
communication modules into their end products for various end-use applications. These end
customers are primarily in the sectors of general IoT, ICV and wireless broadband. For instance:
 Device manufacturers in the general IoT sector use our modules in devices they make,
such as POS terminals. These manufacturers integrate the modules with other
components (such as displays and outer casings) and develop application-specific
software (such as payment systems) to create their end products.
 Manufacturers in the ICV sector use our modules as critical components in T-Boxes and
intelligent cockpits. For example, our modules are integrated into intelligent cockpit
controllers by Tier-1 automotive suppliers. Our modules’ connectivity, external device
support and embedded software environments enable features such as in-vehicle
networking, display integration and the operation of various automotive applications.
The Tier-1 suppliers deliver the completed cockpit controllers to vehicle manufacturers
for installation into vehicles during assembly.
We independently design, develop, and oversee the production of our wireless communication
modules. Nevertheless, we collaborate with certain stakeholders during the design, development
and production process to ensure product quality, technical feasibility and efficient manufacturing.
For instance, we may work with chip providers to offer technical support and consultation related
to their products if needed, such as resolving certain chip-level issues for us during our design and
development process. PCB and other component providers may also provide technical support and
quality management services to ensure compatibility with our modules. We also work with EMS
providers to manufacture and test our modules according to our production requirements, ensuring
quality and yield.
OUR CORE TECHNOLOGICAL CAPABILITIES
Our core technological capabilities enable us to develop, integrate and customize modules
and solutions that cater to diverse industries. Through years of R&D efforts, we have built our
proprietary technologies upon three fundamental pillars: (i) smart module design and development;
(ii) customization capabilities; and (iii) accumulation of knowhow in core sectors.
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Smart Module Design and Development
Advanced Wireless Data Transmission Capabilities
We have established technical expertise in 4G and 5G wireless communication. Our data
transmission modules support both Sub-6 and mmWave 5G NR technologies and a wide range of
global frequency bands. Our mature 5G + Wi-Fi 7 system solutions ensure compatibility and
performance across various networks. We are also actively developing innovative technologies in
fields such as 5G-A and 5G RedCap, working closely with industry partners to advance the 5G
FWA development.
Smart operating system development and optimization
We have accumulated experience in optimizing the Android system performance. We assist
customers in obtaining Google Mobile Services (“ GMS”) certifications for their projects. GMS
certification is a critical process that ensures Android devices meet Google’s compatibility and
performance standards, enabling integration of Google applications and services. Our experience
spans Android versions from Android 8 to the latest Android 15, and we have supported
certification processes for a wide range of devices, including handheld POS machines, payment
tablets, dual-screen desktop devices and handheld barcode scanners.
For system performance optimization, we have developed capabilities in areas such as system
boot time reduction, memory usage efficiency, resource optimization and power consumption
management. These advancements enhance the stability, battery life, and resource efficiency of our
customers’ products.
In terms of multi-media development, our expertise encompasses peripheral multi-media
integration, system architecture design and functionality optimization. We have developed
capabilities to support advanced features such as simultaneous operation of multiple cameras and
customization of camera frameworks. Additionally, we have enabled multi-screen functionality,
including both mirrored and independent displays, and multi-screen sharing. In terms of audio
development, we support multiple bus architectures for external audio coder-decoder, and we have
developed customized architectures for multi-channel audio routing and forwarding.
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AI model deployment and optimization
We integrate AI algorithms into smart hardware platforms and optimize their performance.
Our expertise includes designing customized interfaces for algorithm pre- and post-processing,
while optimizing critical system parameters such as CPU/GPU/NPU workloads, memory usage,
data latency and synchronization. These efforts ensure efficient AI model performance on local
devices, despite the computational power constraint.
We also have experience in deploying and optimizing large-scale AI models on local devices.
We address challenges such as adapting model structures and formats to the SoCs used in our
modules and we provide customers with technical support for performance optimization. For
instance, we offer guidance on techniques such as model quantization and pruning, which reduce
model size and computational requirements without compromising accuracy. These capabilities are
particularly valuable in enabling the deployment of both smaller specialized models and large
language models on local devices.
To address local device computing constraints, we offer hybrid AI solutions that combine
local device and cloud capabilities. For example, local devices handle tasks such as data
pre-processing (for examples, speech or image recognition), while more complex inference tasks,
such as large language model processing, are performed in the cloud. This approach enables
high-performance AI deployment while optimizing resource allocation.
Customization Capabilities
Beyond standalone module development, we have developed a comprehensive set of
technologies to integrate our modules into complex scenarios in response to our customers’ needs.
These capabilities allow us to address the specific functional, environmental and performance
requirements of different application sectors, ensuring high adaptability and reliability across use
cases. Example features of our customization capabilities include:
Pluggable Hardware Architecture
Our pluggable hardware architecture enables flexible configuration and upgrades to meet the
varying needs of different applications. Under the pluggable hardware architecture, functional
parts, such as 4G/5G communication, Bluetooth and NFC, can be integrated or replaced based on
customer requirements. This approach not only enhances scalability but also facilitates
maintenance and technological upgrades. For example, this capability is particularly valuable in
applications requiring global network compatibility, where devices need to support multiple
frequency bands and adapt to the requirements of different regions and network operators.
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High-Bandwidth and Low-Latency Technologies
Our expertise in high-bandwidth and low-latency technologies allows us to deliver high-speed
data transmission solutions. For example, we design modules that operate in millimeter-wave
frequency bands, supporting ultra-wide bandwidth and high throughput. These technologies are
optimized with intelligent algorithms, such as beamforming, which dynamically adjust antenna
paths to improve signal strength and transmission range. These capabilities are particularly
well-suited for FWA scenarios, where high-speed and long-range data transmission is critical for
rural or remote deployments.
Integration of Smart Algorithms for Specialized Applications
We integrate industry-specific algorithms into our module designs to enhance functionality
and user experience. For example, algorithms for gaming acceleration prioritize real-time data
traffic, reducing latency and improving responsiveness. Similarly, voice optimization algorithms
enhance audio clarity through echo cancellation and noise filtering, making them ideal for
applications such as cloud-based communications.
Accumulation of Knowhow in Core Sectors
Our technical team has the ability to identify potential demands from the application
scenarios of our customers’ and transform these insights into innovative products and solutions.
This integration of technical expertise with market understanding allows us to respond quickly to
market changes, achieving higher R&D efficiency and shorter time-to-market for new products.
This virtuous cycle of technology and market alignment further strengthens our leadership in
technology and provides robust support for our ongoing growth in emerging fields.
For instance, in the ICV sector, our modules and solutions support simultaneous voice and
data transmission, enabling real-time video and high-precision location sharing for more efficient
multimedia communication. They support the delivery of rich sensor data and real-time camera
feeds. Additionally, leveraging 5G high-speed communications as the foundation for the integration
of AI computing in the cloud and on device, they provide ample scope for deploying
high-computing-power AI models onboard and supporting personalized growth; Wi-Fi 7
connectivity and rich application interfaces further elevate vehicle intelligence, powering
in-vehicle AI agents, expanding the boundaries of smart cockpit, and accelerating the ICV
evolution in the automotive industry.
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RESEARCH AND DEVELOPMENT
Our R&D and Technology Team
We believe our research and development capabilities are our core competitive strength. We
have built a highly skilled and experienced R&D and technology team that plays a crucial role in
maintaining our leadership position in the industry. As of September 30, 2025, our R&D and
technology team consisted of 807 employees, representing 83.4% of our total employees. Our
R&D and technology team members possess expertise in technology development and product
innovation, and industry experience across various downstream industries. In addition, the majority
of our management team members have R&D or technical backgrounds, with most having over 10
years of experience in the wireless communication industry, and some having nearly 20 years of
experience. Several core management and R&D and technology personnel have held positions at
prominent global communication companies.
R&D Investment
We actively engage in the research and development of ongoing projects to resolve technical
and engineering challenges in customizing our module products and solutions to our customers. In
2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our R&D expenses
amounted to RMB185.9 million, RMB213.9 million, RMB208.1 million, RMB148.3 million and
RMB153.1 million, respectively, representing 8.1%, 10.0%, 7.1%, 6.8% and 5.4% of our total
revenue for the respective periods, respectively. The proportion of aggregate R&D expenses in
aggregate revenue for the three years ended December 31, 2024 was higher than the average in the
global wireless communication module industry, according to Frost & Sullivan. Our R&D expense
was generally in line with our operating results and increased investment in research and
development projects on high-computing-power smart modules, multi-platform and multi-standard
data transmission modules. For further details, please see “Financial Information — Results of
Operations — Research and Development Expenses.” As of September 30, 2025, we had four R&D
centers in China. These R&D centers were located in Shenzhen, Shanghai, Xi’an and Nantong
respectively, to support our R&D activities.
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R&D Process
We have established a comprehensive process to ensure strict control and oversight of our
R&D activities. This process encompasses the following stages:
 Evaluation. During the evaluation stage, we gather market and customer requirements to
identify the key features, technical specifications and objectives of the R&D product. A
comprehensive technical feasibility analysis is conducted to determine the overall
hardware and software solutions, evaluate potential risks and develop corresponding
mitigation measures. This ensures that the product concept meets customer expectations
and is technically viable.
 Project Initiation . Once the evaluation is complete, we finalize the product
specifications and assemble a dedicated project team. A detailed project plan is created,
covering timelines, cost controls and quality assurance measures. We establish clear
objectives, deliverables, quality standards and financial considerations to guide the
project execution.
 Design . Following project initiation, the product specifications are translated into
internal requirements and distributed across various departments. After internal reviews,
the design process begins, covering hardware, software and structural design. Various
departments collaborate to ensure that product development aligns with project plans
and quality requirements.
 Pilot Production and V alidation . Product enters pilot production, with all customer
requirements integrated, functionality fully realized and internal testing completed.
Comprehensive validation is then conducted to ensure compliance with industry
standards and to verify functionality, performance, compatibility, safety and reliability.
Through this process, we resolve any issues identified during pilot runs. Products must
meet predefined hardware and software quality standards before advancing to the next
stage.
 Small-Scale Production. After pilot production and validation, the product enters
small-scale production. At this stage, the product’s structural components and
manufacturing processes are refined to meet the requirements for mass production.
 Mass Production and Maintenance . Once the product reaches the mass production stage,
we work to ensure its long-term reliability and performance. We thoroughly analyze
early production issues and identify causes and implement corrective measures to reduce
the failure rate throughout the product lifecycle.
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Key R&D Focus
During the Track Record Period and up to the Latest Practicable Date, we had been actively
engaged in multiple R&D projects centered on advancing our technological capabilities and
expanding product and solution portfolio. Certain key R&D projects during the Track Record
Period and up to the Latest Practicable Date include:
Project Name and Summary Target Outcome Project Progress
High Computing Power Module
Project : This project aims to
establish and enhance a product
line for high-computing-power
modules ..............
Develop a competitive product line in
high-computing-power modules, targeting
applications in edge computing, distributed
computing and cloud gaming, with the aim to
strengthen our position in emerging markets
such as robotics and expand AI-related
applications of our products
Products with computing power of 48 TOPS
have entered mass production since 2024, and
products with computing power nearing 80
TOPS are under development
Multi-Platform, Multi-Standard
General-Purpose Data
Transmission Module Project :
This project aims to increase the
market share and shipment
volume for general-purpose data
transmission modules across
multiple platforms and standards .
Expand our product portfolio to include
modules for various communication
standards, meeting the diverse needs of IoT
markets and enhancing our customer base and
application coverage
Some products have been developed and
entered mass production since 2022, while
others are under development
5G Intelligent Cockpit Controller
Solution Project : This project
aims to leverage our 5G, Android
and AI technological capabilities
to create a comprehensive
intelligent cockpit controller
solution for ICVs .........
Promote large-scale application of 5G smart
modules in intelligent cockpit controllers as
vehicles increasingly adopt 5G networks and
intelligent cockpits
Multiple generations of products have entered
mass production since 2021, with
higher-performance next-generation products
under development and marketing
4G/5G FW A Solution Project: This
project seeks to establish a
comprehensive product line for
FWA solutions. ..........
Strengthen our R&D and supply chain for FWA
products, expanding shipments and supporting
overseas market expansion through tailored
FWA solutions
Some products have been developed and
entered mass production since 2022, while
others are under development
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Project Name and Summary Target Outcome Project Progress
5G+Cellular Vehicle-to-Everything
(“C-V2X”) Automotive-Grade
Modules and Solutions Project:
This project is focused on
developing next-generation 5G
R16 automotive-grade
communication modules for the
intelligent T-Box market, based
on certain 5G automotive chip
models ...............
Build a comprehensive 5G automotive-grade
module product line and facilitate adoption
by vehicle manufacturers and Tier-1 suppliers
and support our growth in the ICV market,
particularly in overseas markets
Some products were developed and sampled in
2025, while others remain under development
5G-A Modules and Solutions
Project: This project aims to
launch a series of 5G-A modules
and end products to meet demand
for high-end 5G solutions in
overseas markets ..........
Enhance our presence in the high-end 5G
market by introducing advanced 5G-A
products, supporting increased shipments and
market share in overseas markets
Some products were developed and sampled in
2024, while others remain under development
5G RedCap Modules and
Solutions Project: This project
focuses on developing
cost-effective 5G RedCap
modules and solutions for
applications such as FWA,
industrial IoT, video and
wearables .............
Establish a comprehensive 5G RedCap product
line to meet market demand for low-cost 5G
solutions, supporting growth in our 5G
product shipments and market share
Some products were developed and sampled in
2024, while others remain under development
INTELLECTUAL PROPERTY
Our patents, copyrights, trademarks, domain names, know-how, proprietary technologies,
trade secrets and other intellectual property rights are critical to our business operations. As of
September 30, 2025, we had 299 granted patents in China, including nine invention related patents.
As of the same date, we had 100 copyrights and 10 registered trademarks.
We acquire patents through independent development. As of the Latest Practicable Date, we
owned all of our patents as well as patent applications and had no co-own or co-share
arrangements of our patents, copyrights, trademarks and patent applications with third parties. For
further details our portfolio of material intellectual property rights as of the Latest Practicable
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Date, please see “Appendix VI — Statutory and General Information — B. Further Information
about our Business — 2. Our Intellectual Property Rights” for details of our material intellectual
property rights.
During the Track Record Period and up to the Latest Practicable Date, we did not experience
any threatened or pending disputes relating to infringement of intellectual property rights which
would have a material adverse effect on our business. Please see “Risk Factors — Risks Relating
to Our Business and Industry — If third parties claim that we infringe upon their intellectual
property rights, we may incur liabilities and penalties and may have to redesign or suspend the
sales of products or solutions involved” for further details.
SALES, MARKETING AND DISTRIBUTION
Our Sales Network
We have established comprehensive sales networks in domestic and international markets.
The table below sets forth the breakdown of our revenue by geographic region (in terms of
the place of registration of our customers) for the periods indicated.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
China ................ 1,760,368 76.3 1,482,375 69.0 2,138,448 72.7 1,613,043 73.9 1,858,424 65.9
East Asia (1) ............. 272,068 11.8 305,953 14.2 285,931 9.7 205,064 9.4 507,267 18.0
United States ............. 106,344 4.6 72,428 3.4 222,264 7.6 122,886 5.6 240,235 8.5
Europe ............... 96,037 4.2 164,417 7.7 107,625 3.7 86,878 4.0 88,188 3.1
Others (2) ............... 71,115 3.1 122,163 5.7 187,106 6.4 154,157 7.1 127,174 4.5
Total ................ 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Notes:
(1) Excluding China.
(2) Primarily including Samoa and Dominican Republic.
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Our Sales Channel
The table below sets forth a breakdown of revenue contribution by sales channels for the
periods indicated.
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Direct sales ............. 2,055,550 89.1 1,957,271 91.1 2,785,062 94.7 2,046,828 93.8 2,646,733 93.8
Distributorship ............ 250,382 10.9 190,065 8.9 156,312 5.3 135,200 6.2 174,555 6.2
Total ................ 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Our Direct Sales
Overview
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, revenue
generated from our direct sales customers amounted to RMB2,055.6 million, RMB1,957.3 million,
RMB2,785.1 million, RMB2,046.8 million and RMB2,646.7 million, respectively, accounting for
approximately 89.1%, 91.1%, 94.7%, 93.8% and 93.8%, respectively, of our total revenue in the
same periods. Our direct sales customers were mainly from general IoT, ICV and wireless
broadband sectors.
We adopt a direct sales model for the majority of our products to maintain control over key
customer relationships and respond promptly to customer needs and feedback. In addition, many of
our module products and solutions are highly customized to meet the specific requirements of our
customers, which makes it more suitable to adopt a direct sales model. By directly managing
customer interactions, we foster long-term, stable partnerships and enhance customer satisfaction
through our customized product and solutions. We reach our direct sales customers through
targeted marketing efforts, including industry exhibitions, technology forums and seminars, which
allow us to showcase our expertise and engage with potential clients effectively.
Principal Contractual Terms with Direct Sales Customers
We typically enter into framework direct sales agreements with our direct sales customers.
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Salient terms of our framework direct sales agreements with direct sales customers are set out
below:
 Term and Termination : The duration of the direct sales agreements with our direct sales
customers is typically one to three years.
 Payment and Credit Term : We generally grant a credit period to our direct sales
customers of approximately 30 days to 90 days from the date of delivery.
 Shipment and Delivery : We are responsible for delivering our products to locations
designated by our direct sales customers.
 Product Return Arrangements : We typically do not allow our direct sales customers to
return products to us except for product quality issues after they accept the delivery.
 Product Warranty and Assurance : We typically provide a product warranty period of
three years for customers in the automotive industry and one year for other customers.
Our Distributorship
Overview
During the Track Record Period, we also collaborated with distributors to a lesser extent to
sell our products and solutions. Due to our products and solutions’ wide range of applications and
the various industries in which our customer operates, the distributorship model allows us to
streamline our administration and logistics, efficiently managing the large number of end
customers across various industries. This approach also facilitates our penetration into new
markets and establishment and expansion of our sales network in domestic and international
markets. We believe our distributorship model help us implement our sales and marketing
strategies specifically tailored to each geographical market. According to Frost & Sullivan, it is an
industry norm for wireless communication module and solution providers to engage distributors for
the sales of products and solutions.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, the revenue
generated from distributorship amounted to RMB250.4 million, RMB190.1 million, RMB156.3
million, RMB135.2 million and RMB174.6 million, respectively, accounting for approximately
10.9%, 8.9%, 5.3%, 6.2% and 6.2%, respectively, of our total revenue in the same periods. During
the Track Record Period, our sales to distributors declined primarily because we sold more
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products through direct sales after some of our end customers decided to establish direct business
relationship with us in place of through distributors and became our direct customers. The
following table sets forth the movement in the number of our distributors during the Track Record
Period.
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Distributors at the beginning of
year/period .................... 39 43 42 42
New distributors for the year/period .. 485 2 0
Terminated distributors for the
year/period .................... 0953
Distributors at the end of
year/period ................... 43 42 42 59
Substantially all of our distributors were in China during the Track Record Period. The
following table sets forth the number of our distributors by geographic region as of the dates
indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
China ......................... 42 41 40 53
East Asia (1) ..................... 1123
United States .................... ————
Europe ........................ ——— 1
Others (2) ....................... ——— 2
Total .......................... 43 42 42 59
Notes:
(1) Excluding China.
(2) Primarily including Samoa and Dominican Republic.
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During the Track Record Period, our number of distributors remained relatively stable.
During the Track Record Period, we did not initiate any terminations of business relationship with
our distributors.
Distributor Management
An effective distribution network is essential for enhancing our sales performance and
ensuring consumer satisfaction. As such, we maintain rigorous management of our distributors in
the following aspects. We and our distributors maintain a seller and buyer relationship. Our
distributors buy our products from us and then resell the products to end customers.
We maintain proactive approach to distributor management to ensure market order,
compliance and business alignment. Our distributors are selected based on their sales network,
financial condition, sales strategy and logistics and warehousing, among other criteria. We
establish clear operational guidelines for our distributors and implement reporting mechanisms
where our distributors are required to report new end customers to us to safeguard distributor
business interests and prevent cannibalization. In particular, as part of our distributor management
policy, we require our distributors to report to us before establishing business relationships with
new end customers. If a distributor submits a request to cover an end customer already covered by
the other distributor, we will not grant approval to such overlapping coverage. This allows us to
track the sales activities of our distributors, thereby mitigating risks associated with
cannibalization. Additionally, we investigate any incidents of cannibalization and are entitled to
terminate our business relationship with those distributors that engage in cannibalization. By
maintaining clear visibility over the sales activities of our distribution network, we believe that
these measures effectively mitigated the risk for cannibalization and maintained efficiency of our
distribution channels. We also generally do not allow our distributors to sell our products in
multiple regions. We were not aware of any overlapping end customer coverage among our
distributors during the Track Record Period and up to the Latest Practicable Date. To ensure an
orderly distribution network, we require our distributors to adhere to our recommended retail price
guideline. Distributors are not allowed to sell our products below the recommended retail price
absent specific application to, and approval from, us. We require distributors to immediately
rectify if we identify any violations of this price guideline by them. During the Track Record
Period and up to the Latest Practicable Date, we were not aware of any incidents of
cannibalization among our distributors, nor any violations of our recommended retail price
guideline.
We regularly review distributor performance based on their sales volume, customer
engagement, including the number of new customers and marketing strategies of our major
products and operational compliance and assess contract renewals accordingly. As part of our
distributor management policy, we communicate with our distributors to evaluate their sales
progress and minimize inventory risks. Our distributors typically place orders with us after they
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have received purchase orders, which inherently reduces their inventory risks and accelerates their
inventory turnover. We do not impose minimum purchase requirement on our distributors.
Considering that we do not impose minimum purchase requirement on distributors, and that our
distributors are generally not allowed to return any unsold products to us, our Directors are of the
view that we do not have any material channel stuffing issue. In event of any inventory
overstocking, we work collaboratively with the distributor to optimize stocking plans.
To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, all of our distributors were Independent Third Parties. As of the Latest
Practicable Date, we were not aware of any potential abuses or improper use of our name by our
distributors which could adversely affect our reputation, business operation or financial condition.
To the best of our knowledge, we do not have any sub-distributor during the Track Record Period.
During the Track Record Period and up to the Latest Practicable Date, we had no material
unresolved disputes or lawsuits with our distributors.
Principal Contractual Terms with Distributors
During the Track Record Period, we generally entered into framework distribution agreements
with each of our distributors. The key terms of our distribution agreements included the following:
 Term: The term of the distribution agreement is typically one year, subject to renewal
based on our evaluation of our distributors.
 Pricing policy : A fixed price is provided in each purchase order under the framework
distribution agreement.
 Payment and Credit Term : We generally require our distributors to make prepayments
before our shipment. We may grant a credit period of 30 days to some of our long-term
distributors.
 Shipment and delivery : We are responsible for delivering our products to locations
designated by our distributors or end customers.
 Product Return Arrangements : We typically do not allow our distributors to return
products to us except for product quality issues after they accept the delivery.
 Product Warranty and Assurance : We typically provide a product warranty period of one
year.
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Pricing
We price our products considering a variety of factors, including (i) the cost of relevant
products and solutions, including raw material costs, research and development expenses and
outsourced production costs. In particular, more complex or advanced products may require higher
level of R&D investments and result in higher prices; (ii) customer demand; and (iii) market
condition, including industry pricing trends and the cost sensitivity of our customers. In addition to
these pricing factors, we adopt volume-based pricing strategies to incentivize customers to place
larger orders, driving higher sales volumes and optimizing cost efficiencies. We adjust the final
pricing based on the specific customer on a case-by-case basis.
Marketing
Our marketing efforts focus on customer engagement, promotion of our new and existing
products and solutions and reinforcement of our leadership and reputation in the wireless
communication module industry. We strive to strengthen our relationships with existing key
customers and acquire new customers, including distributors and direct sales customers. We
expand our customer base through technical consultations with suppliers, industry partnerships and
proactive market outreach through means such as industry exhibitions and introductions by
consultancies.
In particular, as we advance our business strategy, we are actively targeting AI-powered smart
devices, robotics and other emerging market segments to further broaden our customer network
and establish long-term growth opportunities. Our ability to acquire and retain customers is
underpinned by our brand reputation, industry experience and proven track record of collaboration
with leading enterprises across multiple sectors.
OUR CUSTOMERS
During the Track Record Period, our customers primarily consisted of (i) direct sales
customers; and (ii) distributors. Our direct sales customers during the Track Record Period
included (i) automotive manufacturers and Tier-1 suppliers; (ii) IoT device manufacturers; (iii)
electronics and smart hardware manufacturers; and (iv) mobile device and communication product
manufacturers. We do not provide financial compensations to our customers. During the Track
Record Period and up to the Latest Practicable Date, we did not have any material disputes, breach
of terms of framework agreements or early termination of our contractual relationships with our
customers.
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In 2022, 2023, 2024 and the nine months ended September 30, 2025, revenue generated from
our five largest customers in each year/period of the Track Record Period was RMB701.2 million,
RMB847.2 million, RMB1,388.8 million and RMB1,398.0 million, respectively, accounting for
30.4%, 39.5%, 47.2% and 49.5% of our total revenue in the same periods, respectively. Revenue
from our largest customer in each year/period of the Track Record Period accounted for 8.3%,
24.3%, 32.5% and 28.2% of our total revenue in 2022, 2023, 2024 and the nine months ended
September 30, 2025, respectively. All of our five largest customers were Independent Third Parties
during the Track Record Period.
To the best of our knowledge and as of the Latest Practicable Date, we were not aware of any
information or arrangement that would lead to the termination of our relationships with any of our
major customers. None of our Directors and their respective associates, or Shareholders who own
5% or more of the total issued Shares had any interest in any of our five largest customers during
the Track Record Period.
The following table sets forth the details of our five largest customers in each period during
the Track Record Period. All the five largest customers in each year/period during the Track
Record Period were direct sales customers.
Rank Customer
Sales
amount
Percentage
of total
revenue Type of product purchased Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For year ended December 31, 2022
1 Customer A (1) ..... 192,440 8.3 5G smart modules 100% prepayment 2021
2 Customer B (2) ..... 157,134 6.8 4G/5G data transmission
modules and solutions
100% prepayment 2019
3 Customer C (3) ..... 119,178 5.2 5G data transmission modules 30 to 60 days 2021
4 Customer D (4) ..... 118,948 5.2 4G data transmission modules
and smart modules and
solutions
30 days 2019
5 Customer E
(5) ..... 113,514 4.9 5G data transmission modules 100% prepayment 2022
Notes:
(1) Customer A is a public company established in Chinese mainland, listed on Shenzhen Stock Exchange and engaged
in the distribution of electronic components, as well as the provision of integrated supply chain services and
solutions.
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(2) Customer B is a public company established in Chinese mainland, listed on Shenzhen Stock Exchange and engaged
in the development and supply of electronic products, intelligent solutions and technology services.
(3) Customer C is a public company established in Chinese mainland, listed on Shenzhen Stock Exchange and engaged
in the design, development, and manufacturing of electronic products and smart hardware solutions.
(4) Customer D is a private company established in Taiwan, China, engaged in the distribution of electronic
components and the provision of supply chain and procurement services.
(5) Customer E is a public company established in Chinese mainland, listed on Shenzhen Stock Exchange and engaged
in the distribution of mobile devices, communication products and the provision of integrated supply chain and
value-added services.
Rank Customer
Sales
amount
Percentage
of total
revenue Type of product purchased Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For year ended December 31, 2023
1 Customer F (6) ..... 521,769 24.3 4G/5G data transmission
modules and smart modules
and solutions
30 to 120 days 2018
2 Customer E ...... 95,870 4.5 5G data transmission solutions 100% prepayment 2022
3 Customer G
(7) ..... 86,962 4.0 4G data transmission modules
and smart modules and
solutions
30 days 2023
4 Customer B ...... 79,232 3.7 4G/5G data transmission
modules and solutions
100% prepayment 2019
5 Customer H
(8) ..... 63,346 2.9 4G/5G data transmission
modules
30 to 90 days 2020
Notes:
(6) Customer F includes (i) a public company, headquartered in Shenzhen, China, listed on Hong Kong Stock Exchange
and Shenzhen Stock Exchange and engaged in the production of automobiles, electronic parts and production and
assembly of electric vehicle; and (ii) a public company, headquartered in Shenzhen, China, listed on Hong Kong
Stock Exchange and primarily engaged in the design, manufacture and assembly of handset components, mobile
intelligent terminal modules and other electronic products.
(7) Customer G is a private company established in Samoa, engaged in the provision of logistics support, supply chain
solutions, and value-added business services across various industries.
(8) Customer H is a private company established in Chinese mainland, engaged in the provision of IoT connectivity,
platform services and integrated industry solutions.
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Rank Customer
Sales
amount
Percentage
of total
revenue Type of product purchased Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For year ended December 31, 2024
1 Customer F ...... 955,098 32.5 4G/5G data transmission
modules and smart modules
and solutions
30 to 120 days 2018
2 Customer I
(8) ..... 166,524 5.7 4G/5G data transmission and
smart modules
100% prepayment 2020
3 Customer G ...... 131,477 4.5 4G data transmission modules
and smart modules and
solutions
30 days 2023
4 Customer J
(9) ..... 70,336 2.4 4G/5G data transmission
modules
30 to 60 days 2021
5 Customer K (10) .... 65,381 2.2 4G/5G data transmission
solutions
72 days 2020
Notes:
(8) Customer I is a public company established in Chinese mainland, listed on Shenzhen Stock Exchange and engaged
in the distribution of electronic components and the provision of integrated supply chain solutions and technical
support services.
(9) Customer J is a private company established in Lithuania, engaged in the development and manufacturing of IoT
devices and solutions.
(10) Customer K is a private company established in the U.S., engaged in the design, development and supply of mobile
devices and IoT solutions for mobile operators and enterprise customers
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Rank Customer
Sales
amount
Percentage
of total
revenue Type of product purchased Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For the nine months ended September 30, 2025
1 Customer F ...... 796,093 28.2 4G/5G data transmission
modules and smart modules
and solutions
30 to 120 days 2018
2 Customer L
(11) .... 212,634 7.5 5G data transmission modules
and solutions
Up to 90 days 2024
3 Customer M (12) .... 153,067 5.4 4G/5G smart modules and
solutions
60 to 90 days 2022
4 Customer N (13) .... 123,449 4.4 5G data transmission modules Up to 90 days 2024
5 Customer O (14) .... 112,726 4.0 4G/5G smart modules and
solutions
Up to 90 days 2024
Notes:
(11) Customer L is a private company established in Tokyo, Japan, engaged in the development and sales of wireless
data transmission devices.
(12) Customer M is a private company headquartered in the U.S., engaged in the development and sales of touchscreen
devices and solutions.
(13) Company N is a private company established in Chinese mainland, engaged in the sales of electronic products and
the provision of supply chain management services.
(14) Company O is public company established in the U.S., listed on NASDAQ, engaged in the design, development,
marketing and sale of wireless connectivity products and solutions.
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During the Track Record Period, we generated a significant share of our revenue from our top
five customers. We experienced fluctuations of revenue contribution by our top customer and our
top five customers primarily because (i) we actively developed major customers in key
downstream application sectors such as ICV to further our customer and industry reach; (ii) we
actively expanded our overseas market and developed new overseas major customers (for example,
Customer J and Customer K, two of the five largest customers in 2024, were overseas customers
who were not among the five largest customers in 2022 or 2023); and (iii) some of our top five
customers adjusted their procurement strategies with us from time to time. Such adjustments to
procurement strategies are influenced by a range of commercial and operational factors. For
instance, our customers’ procurement decisions, including the volume and timing of their orders,
are directly linked to their own business performance and market conditions. For instance, in the
ICV sector, our customers face intense competition and pricing pressure, which can impact their
sales volumes, product mix, and inventory management strategies. Please see below for details of
the market competition in the ICV sector. As a result, their demand for our modules may fluctuate
based on their own production schedules and sales forecasts, which can be subject to significant
and rapid changes. Additionally, as part of their ordinary course of business, large and
sophisticated customers, including some of our top customers, may periodically review their
supply chain management to enhance cost efficiency and supply security. To achieve these
objectives, they may adopt strategies to diversify their supply of critical components to gain
greater control over their supply chain and cost structure.
As a result, our top customer and top five customers list may experience changes in different
years/periods. We expect to continue to generate a significant portion of revenue from our major
customers. We have maintained long-term and stable collaboration relationships with our five
largest customers. During the Track Record Period and up to the Latest Practicable Date, we did
not have any material disputes with any of our five largest customers and there was no indication
or sign that they would alter the existing relationship with us in any aspect in the near future.
Revenue contributed by our five largest customers in each period of the Track Record Period
was relatively significant. In particular, in 2023, 2024 and the nine months ended September 30,
2025, revenue generated from our largest customer, Customer F, accounted for 24.3%, 32.5% and
28.2% of our total revenue, respectively. Major customers typically require large-scale,
high-quality and reliable wireless communication modules and solutions, which aligns with our
capabilities in product design and customization. For example, Customer F’s leading position in
the ICV market and its robust business growth have driven substantial demand for our modules,
particularly for applications in T-Boxes and intelligent cockpits. While major customers may
possess strong bargaining power, which may affect our pricing and profitability, we believe the
benefits outweigh the associated risks. We strategically partnered with and established a mutually
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beneficial business relationship with these major customers to accelerate our revenue growth,
enhance our brand image in the industry, facilitate the technological improvement of our existing
products and research and development of our new products, and improve our economies of scale.
China’s automobile industry, especially the NEV industry, has recently faced certain
challenges, such as intensified pricing pressure within the industry and certain leading market
players undertook price reductions. In addition, evolving regulatory developments may continue to
impact the market condition and the competitive landscape. According to Frost & Sullivan, the
NEV industry in China experienced a pricing competition in 2025 as a transitional phenomenon
during a period of rapid expansion and certain major NEV market participants in China have
significantly reduced prices on certain entry-level models to intensify competition, and also led
major NEV market participants to exert pressure on their supply chain to reduce costs and manage
their own working capital. At the policy level, regulators and industry associations in China have
repeatedly emphasized the need to avoid disorderly price wars and to guide the market back
towards value-driven development. In September 2025, the China Association of Automobile
Makers issued the Code of Conduct for Payment to Suppliers by Vehicle Manufacturers, which
requires settlement to suppliers within 60 calendar days from the date of delivery and acceptance,
and encourages the use of cash transfers or bank acceptance drafts in lieu of commercial bills. This
measure aims to improve supplier cash flow and investment visibility, thereby stabilizing upstream
and downstream relationships. However, uncertainties remain regarding the implementation and
enforcement of such rules. The above factors may continue to exert margin pressure on the
automobile industry in China. In addition, our ICV customers may explore alternative
technological solutions for its vehicles, which could reduce its reliance on our wireless
communication modules. Please see “Risk Factors — Risks Relating to Our Business and Industry
— Our products and solutions are used by end customers of multiple industries and sectors.
Factors that adversely affect these industries and sectors may adversely impact our business,
financial condition and results of operations.”
Our collaboration with customers in the ICV sector is typically structured around a
“design-win” model. This is a standard and rigorous process in the automotive industry where we
are selected as the designated supplier for a specific wireless communication module for a
particular vehicle model. This typically occurs early in the customer’s vehicle development cycle.
Once we secure the design-win, we work closely with the customer to design and customize our
module to meet the specific technical and performance requirements of their new vehicle model.
Upon successful development and testing, our module becomes an integral and essential
component of that vehicle’s electronic architecture. During the Track Record Period, the numbers
of modules we sold to Customer F were 271.2 thousand units, 477.1 thousand units, 791.1
thousand units, and 690.9 thousand units. As of the Latest Practicable Date, the design-win had
been applied for over six vehicle models of Customer F.
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In line with common industry practice for such arrangements, we typically do not receive
upfront development fees from our ICV customers. However, because our module is
custom-developed and deeply integrated into the vehicle’s design, it is generally less feasible for
the customer to switch to an alternative supplier for that specific vehicle model post-development.
While our contracts generally do not contain firm minimum purchase commitments,
customers provide us with long-term, non-binding demand forecasts for the product’s expected
lifecycle. Our actual sales volume is subsequently driven by the purchase orders placed by the
customer, which are correlated with the market success and manufacturing volume of their vehicle.
Measures to Mitigate Customer Concentration Risk
Diversification within the ICV Sector
To mitigate the risks associated with customer concentration, we plan to continue to expand
our customer base by exploring business opportunities. As of the Latest Practicable Date, we had a
diverse customer base in the ICV sector and secured orders for development projects from
customers. Our product portfolio for the ICV sector is comprehensive and extends well beyond the
5G smart modules currently procured by Customer F. We have developed and offer a full suite of
products, including 4G smart modules and 4G and 5G data transmission modules, among which
some products are specifically tailored for intelligent cockpits. These products can be used for
various applications such as unmanned logistics vehicles and robotaxis. This product
diversification allows us to target a broader segment of the ICV market. For instance, we have
experienced increase in shipments of 4G modules to certain ICV customers during the Track
Record Period. As of the Latest Practicable Date, we were having ongoing and upcoming business
relationship with various ICV customers other than Customer F, including design wins, products in
the R&D phase, products in the testing phase and products in mass production phase. Among these
ICV customers, more than 30 customers had already generated revenue for us as of the Latest
Practicable Date.
In addition, new market opportunities for our 5G modules are expected to emerge. These
opportunities are expected to be further supported by the trend led by leading market players such
as Customer F. Other ICV customers are expected to follow leading market players and transition
to adopt more 5G module products, thus creating additional opportunities for our products.
Broader adoption by other customers will reduce our reliance on any single customer.
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Diversification of Product Offering and Supply Chain
In addition to continued diversification of customer base, we also plan to (i) diversify our
product portfolio by investing in the research and development of products with higher gross profit
margin; and (ii) optimize our supply chain by engaging and keeping a diverse pool of EMS
providers and raw material suppliers to enhance our cost efficiency. We believe this will allow us
to sustain a balanced and resilient business while capitalizing on the opportunities with leading
customers.
Diversification across Application Sectors
To mitigate the risks associated with customer concentration and our reliance on the ICV
sector, we are also actively implementing a long-term strategy to foster a more balanced business
structure across our key application sectors: ICV , general IoT and wireless broadband. Our goal is
to achieve a more balanced revenue contribution from these sectors over time. In furtherance of
this strategy, we have dedicated resources to developing markets outside of the ICV sector,
particularly in overseas markets. For instance, for the nine months ended September 30, 2025, we
have recorded considerable revenue contribution from newly developed overseas customers, such
as a Japanese customer for 5G data transmission modules for the wireless broadband market, a
U.S.-headquartered customer for smart modules and solutions used in retail devices, and a South
Korean customer for smart modules and solutions used in logistics. The successful development of
these new customer relationships demonstrates the progress of our strategy to diversify our
business and reduce our dependence on any single industry sector.
Third-Party Payment Arrangements
During the Track Record Period, certain of our customers (including certain direct customers
and distributors individually or collectively, the “ Relevant Customer(s) ”) settled their outstanding
payments with us through accounts of third-party payors designated by them (such arrangements,
the “ Third-Party Payment Arrangements ”). For the periods ended December 31, 2022, 2023,
2024 and the nine months ended September 30, 2025, seven, six, seven and two Relevant
Customers used Third-Party Payment Arrangements, respectively, and the aggregate amount of
payment we received under the Third-Party Payment Arrangements amounted to RMB3.4 million,
RMB18.1 million, RMB9.5 million and RMB0.2 million, respectively, accounting for
approximately 0.1%, 0.8%, 0.3% and 0.0% of total revenue, respectively. During the Track Record
Period, no individual Relevant Customer made a material contribution to our revenue. To the best
of our knowledge, none of the third-party payors designated by the Relevant Customer is our
connected person, and all designated third-party payors are independent from each of our
Directors, senior management, and Controlling Shareholders.
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To the best of our knowledge, the Relevant Customers used Third-Party Payment
Arrangements primarily because certain Relevant Customers used the accounts of their affiliated
entities for convenience of payment because they preferred to avoid the inconvenience of using
corporate accounts, or it was more convenient for or in line with the internal financial management
practice of some Relevant Customers to use the accounts of certain affiliated parties, which,
according to Frost & Sullivan, is a common commercial practice in China.
Our Directors confirm that, during the Track Record Period, (i) we did not proactively initiate
any Third-Party Payment Arrangement; (ii) we did not provide any discount, commission, rebate or
other benefits to any of the Relevant Customers to facilitate or encourage the Third-Party Payment
Arrangements; and (iii) the pricing and payment terms of the agreements we entered into with the
Relevant Customers were in line with other customers who did not use the Third-party Payments.
During the Track Record Period, we implemented measures to monitor and manage
Third-Party Payment Arrangements:
 V erification of genuine transactions : We required Relevant Customers to provide
supporting information, including payor account details, payment information and
payment agreements to confirm the genuineness of the transactions;
 Fraud and money laundering prevention : We conducted know-your-customer
procedures, held regular business meetings to understand customer operations, and
maintained active communication with customers.
To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date: (i) all settlements under Third-Party Payment Arrangements were based on
genuine transactions and valid contracts; (ii) settlement amounts under Third-Party Payment
Arrangements matched the relevant transaction amounts; (iii) we are not aware of any commercial
bribery, money laundering or tax evasion related to such Third-Party Payment Arrangements; (iv)
no Relevant Customer claimed any interest in payments made or received through Third-Party
Payment Arrangements; and (v) we did not encounter refund requests, disputes or material claims
related to Third-Party Payment Arrangements.
As advised by our PRC Legal Advisor, based on the foregoing, the Third-Party Payment
Arrangements do not violate any mandatory provisions of applicable laws or regulations in China.
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Termination of Third-Party Payment Arrangements
In line with our commitment to strengthen internal control, in June 2025, we had terminated
Third-party Payment Arrangements. We do not plan to engage in any Third-party Payment
Arrangement again in the future. We believe that this termination has not had, and will not have, a
material adverse effect on our business or financial performance, given that (i) payment received
from Third-party Payment Arrangements represented an insignificant percentage of our total
revenue during the Track Record Period; (ii) the termination of Third-Party Payment Arrangements
did not affect the payment settlement arrangement from our Relevant Customers to us; and (iii) we
have not experienced any customers altering their relationship with us as a result of the cessation
of Third-party Payment Arrangement. For risks related to the Third-party Payment Arrangement,
please see “Risk Factors — Risks Relating to Our Business and Industry — We are subject to risks
relating to Third-Party Payment Arrangements.”
Enhanced Internal Control
To mitigate risks associated with Third-Party Payment Arrangements, we have implemented
and strengthened various internal control measures, including:
 Initiating rectification measures and informing employees of the enhanced internal
control policies;
 Requiring employees to avoid proactively initiating Third-party Payment Arrangements,
informing customers that Third-party Payment Arrangements are no longer accepted, and
adhering to policies for terminating such practices;
 Mandating employees to collect customers’ bank account details, including account
names, during contract signing and ensuring all payments are made using the contracting
party’s account; and
 Tasking the finance department with regular reviews of internal operations, including
sample contract checks to verify that payers match the contracting parties, among other
measures.
Based on the review of the implementation of the abovementioned measures, our Directors
are of the view that such measures are effective and adequate in preventing risks associated with
Third-Party Payment Arrangements in the future.
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RA W MATERIALS AND PROCUREMENT
We outsource the production of our products and solutions to EMS providers. We procure a
range of raw materials, primarily including (i) baseband chips; (ii) radio frequency chips; (iii)
memory chips; (iv) SoCs; and (v) other electronic components for the production of our modules
and solutions. We source our raw materials and services from suppliers with reputable operations
and credible and stable track record in the industry, as we believe the quality of raw materials and
services affects the quality of our products and in turn, our business and reputation.
As of December 31, 2022, 2023, 2024 and September 30, 2025, we had 11, 13, 16 and 13
EMS providers, respectively. In 2022, 2023, 2024 and the nine months ended September 30, 2024
and 2025, outsourced production costs amounted to RMB111.4 million, RMB98.1 million,
RMB137.2 million, RMB97.4 million and RMB117.2 million, respectively.
Our procurement process includes three phases: procurement planning, outsourced
manufacturing and delivery and inspection. The following diagram illustrates the key steps in these
phases, the respective duration and the parties involved.
R&D and procurement
plan Order placement Raw materials
procurement Production Inspection Delivery
Duration
Parties involved
Four to eighteen
months(1) One to two weeks Six to eight weeks One to five weeks(2) One to two days Up to 20 to 30 days (3)
Our Group
Our Group
EMS providers
Our Group
Raw materials suppliers
EMS providers
EMS providers
Our Group
EMS providers
Our Group
EMS providers
Notes:
(1) For modules and solutions that are less complex, such as the ones used in consumer electronics sector, our R&D
period is typically four to six months. For more complex products and solutions, such as the products and solutions
used in automotives, our R&D period is typically twelve to eighteen months.
(2) For less complex modules and PCBAs, the production period is usually one to three weeks. For more complex
modules and solutions, such as handheld devices, the production period is usually two to five weeks.
(3) Delivery time of our modules and solutions vary depending on the destination and delivery method. For example,
delivery to Chinese mainland by air may take one to two days, while delivery to international destinations by cargo
may take up to 20 to 30 days.
 Procurement plan : Our procurement team develops procurement plans based on
historical demand, sales forecasts, inventory levels and market expansion strategies. We
also take into account various factors including the manufacturing lead time and
production schedules of our EMS providers.
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 Outsourced manufacture : Once procurement plans are finalized, we issue purchase
orders to our raw material suppliers and production orders to our EMS providers
pursuant to procurement plans. Raw material suppliers deliver raw materials to our
designated EMS providers and our EMS providers manufacture modules and solutions
according to specifications. Upon completion, our EMS providers test, inspect and
warehouse our products and solutions. Our on-site quality control team stationed at the
EMS provider’s manufacturing facility, also closely manages and monitor the process to
ensure the manufactured modules and solutions conform to our standards.
 Inspection and delivery : After our EMS provider warehouse the manufactured modules
and solutions, our quality control team conducts independent inspections and testing to
ensure compliance with our quality standards and specifications. Once the products and
solutions are approved, we generally arrange the shipping and delivery from our EMS
providers’ warehouses to locations designated by our customers.
We generally do not enter into long-term supply agreements with fixed price arrangements.
To mitigate supply chain risks and price volatility, we maintain regular communication with our
suppliers and closely monitor raw material costs through market trend analysis and periodic price
assessments. We procure raw materials and adjust inventory levels based on price forecast to
control our raw material costs and avoid disruption in our supply chain. During the Track Record
Period and up to the Latest Practicable Date, we had not faced any material increase in raw
material or production costs which would have a material adverse effect on our business, results of
operations or financial condition. For further details of our inventory management, please see
“Logistics and Inventory Management” in this section. Moreover, we test and ensure the
compatibility of alternative raw materials with our modules and solutions at R&D stage and
evaluate potential new raw materials suppliers to maintain the flexibility to switch to alternative
materials or suppliers in the event of severe shortages or price volatility of certain raw materials.
During the Track Record Period and up to the Latest Practicable Date, we did not experience
quality issues or shortages during our procurement that materially affected our operations. During
the Track Record Period and up to the Latest Practicable Date, we had not adopted any hedging
policies to mitigate the effect of fluctuations in the prices of raw materials.
Impact of Global Chip Supply and Raw Material Price Volatility
Our business and financial performance are dependent on the stable and cost-effective supply
of raw materials, primarily semiconductors such as baseband chips, SoCs and memory chips. The
global semiconductor industry has, in recent years, experienced volatility, including supply
shortages and cyclical price fluctuations, which can impact our operations.
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Supply of Certain Key Raw Materials
Supply of Baseband Chips and SoCs
The global semiconductor industry experienced a significant supply shortage from late 2021
through 2022, driven by pandemic-related manufacturing disruptions, logistics challenges, and a
surge in downstream demand from the 5G, electric vehicle and remote work sectors.
Despite this challenging industry-wide environment, we have not experienced material
disruptions to our operations or financial performance resulting from a shortage of our baseband
chips and SoCs during the Track Record Period. We believe the global supply for these specific
components has been largely sufficient for our needs. This is primarily attributable to our proactive
supply chain management and the strong, long-term relationships we maintain with our principal
chip suppliers. Pricing for these core components has also remained relatively stable, and in some
cases, we have been able to achieve gradual cost reductions through bulk purchase discounts and
economies of scale.
Impact of Memory Chip Price V olatility
Price volatility in memory chips (such as DRAM and NAND), which are a key component in
most of our modules, remained volatile and cyclical. According to Frost & Sullivan, the market for
memory chips is known for its cyclical and often sharp price fluctuations. For example, price of
memory chips experienced a period of price declines in 2022 and 2023 due to market overcapacity
and weak consumer demand, and began to rebound in 2024 and 2025, driven by factors including
surging demand for AI servers and production cuts by major manufacturers.
This price volatility directly affects our material costs. To illustrate the proactive measures
we take, our supply chain team identified the beginning of a price increase cycle in early 2025 and
strategically built up inventory. As a result, our inventory of memory chips increased by
approximately two times from December 31, 2024 to September 30, 2025. By procuring a
sufficient volume of chips before the full effect of the price increases, we were able to secure
supply for future product deliveries and partially mitigate the impact of rising costs on our gross
profit margin.
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According to Frost & Sullivan, the current round of price increases, caused by
supply-demand dynamics, is expected to continue into the first half of 2026, for the reasons below:
 Supply-side Contraction: Major memory chip manufacturers have shifted production
capacity towards high-end memory chips, such as High Bandwidth Memory and
high-end DDR5 memory required for AI servers, in pursuit of higher margins, which has
squeezed the supply of traditional memory chips that we primarily procure.
 Demand-side Transformation: As AI transitions from the training phase to the inference
phase, the demand for memory has significantly changed. There is rapid growth in
demand for fast data access from cloud AI servers, as well as for larger memory
capacities in end devices like AI PCs and AI phones.
 Inventory Cycle: After a prolonged period of price declines, inventory within the
industry chain had fallen to low levels. Once demand signals became clear, inventory
replenishment by downstream manufacturers, combined with price increase expectations,
created a reinforcing cycle that further exacerbated supply tightness.
Our Mitigating Measures
We have implemented a comprehensive strategy to manage the risks associated with
semiconductor supply and price volatility:
 Supplier Base Diversification: We are committed to continuously diversifying our
supplier resources to enhance supply chain resilience. In 2022, 2023, 2024 and the nine
months ended September 30, 2025, we had 18, 30, 34 and 27 baseband chip suppliers,
respectively. For memory chips, while we source from major international
manufacturers, we are also increasing our use of qualified domestic suppliers.
Specifically, during the Track Record Period, the number of memory chip suppliers from
whom we procured during each year/period generally increased on a continuous basis.
These alternative domestic suppliers include other domestically and internationally
recognized semiconductor companies. We primarily use chips based on mature process
technologies that are available from multiple suppliers, which reduces dependency on
any single supplier. All chips procured, regardless of the supplier, must satisfy our
requirements to ensure they meet our internal quality standards and the specifications
required by our customers. As a result, we believe that the quality of chips provided by
alternative domestic suppliers are comparable to those provided by international
suppliers. In 2022, 2023, 2024 and the nine months ended September 30, 2025, we had
52, 58, 66 and 79 memory chip suppliers, respectively. During the Track Record Period,
approximately 10% to 20% of our procurement volume of memory chips was sourced
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from domestic suppliers, with the remaining portion procured from overseas suppliers.
Domestic chips generally have a price advantage. Specifically, during the Track Record
Period, the average procurement unit price of domestically sourced memory chips was
less than half of that of imported memory chips. We believe that chips provided by
domestic suppliers are generally comparable with that provided by international
suppliers.
 Strategic Inventory and Supply Chain Management: We employ a proactive
inventory management strategy to buffer against price fluctuations and potential supply
tightness. We work closely with our customers to obtain rolling order forecasts, which
allows us to plan our raw material procurement in advance. In addition, we maintain a
formalized mechanism to forecast memory chip price trends, which is critical for
inventory management and procurement strategy. The mechanism is monitored through
aggregated data from multiple sources, including price trackers from industry analysts,
supplier communications, direct market intelligence from our procurement team, and
macroeconomic indicators. Forecasts are generated on a weekly basis, with a
comprehensive review and memorandum issued monthly. Oversight of this mechanism is
the responsibility of the procurement team, in close coordination with our finance and
supply chain management teams. In practice, the mechanism operates by synthesizing
the collected quantitative and qualitative data, which will then be presented to our
management, where they directly inform decisions regarding inventory levels and
purchase timing to mitigate financial risk and capitalize on market opportunities. Based
on these forecasts and our analysis of market trends, we maintain a reasonable level of
safety stock for memory chips. For example, our supply chain team identified the
beginning of a price increase cycle of memory chips in early 2025 and strategically built
up inventory. As a result, our inventory of memory chips increased by approximately
two times from December 31, 2024 to September 30, 2025. Based on our current
inventory levels and procurement plans, we expect that our memory chip supply can be
maintained on a stable basis for approximately two quarters. This strategic inventory
management is a key tool we use to reduce the impact of price volatility on our
production costs.
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 Long-term Partnerships with Suppliers: We proactively establish long-term
partnership with high-quality chip suppliers to seek a stable supply of chips. In addition,
we actively cooperate with suppliers in the debugging and validation of newly
developed chips in order to obtain, in respect of such chips, priority access, supply
assurance and/or preferential pricing.
 Customer Communication: We maintain close and transparent communication with our
customers regarding significant shifts in the cost of key components. Where
commercially feasible and upon reaching an understanding with our customers, we seek
to appropriately adjust the selling prices of our products to partially transfer the
increased material costs.
OUR SUPPLIERS
Supplier Selection and Management
During the Track Record Period, our suppliers primarily consisted of (i) raw material
suppliers; and (ii) EMS providers. We typically engage reputable suppliers with proven track
records to ensure the quality of our products. We consider a comprehensive set of factors when
selecting suppliers, including their technological expertise, product quality, responsiveness and
cost competitiveness. New suppliers must undergo rigorous qualification processes, including
registration, capability assessment, material certification, on-site inspections (as necessary) and
contractual agreements before being included in our approved supplier list. Qualified suppliers are
regularly evaluated on their periodical performance based on metrics including product quality,
corporate social responsibility and compliance. As of December 31, 2022, 2023, 2024 and
September 30, 2025, we had 497, 520, 578 and 665 qualified suppliers included on our approved
supplier list, respectively. Additionally, we require our suppliers to comply with our internal
supply management policies. Upon receiving raw materials from our raw material suppliers, we
retain the right to reject or return based on our inspection and examination results and suppliers
are generally liable to us and our customers for any product quality issues caused by them. We
communicate with EMS suppliers regarding quality standards and thoroughly inspect the finished
products to ensure that they meet all the technical requirements set forth in our product designs.
Non-compliance or significant quality issues will trigger immediate reassessment, which may
result in warnings, procurement restrictions or removal from the qualified supplier list.
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Raw Material Suppliers
As of December 31, 2022, 2023, 2024 and September 30, 2025, we had 481, 500, 553 and
567 raw material suppliers, respectively. We procure (i) chips, primarily including baseband chips,
SoCs, radio frequency chips and memory chips; (ii) electronic components such as PCB; and (iii)
end product materials, primarily including monitors, cameras and batteries from raw material
suppliers. We generally enter into framework agreements with raw material suppliers, which set
forth the general terms and conditions of purchase. Salient terms of the framework supply
agreements with our raw material suppliers typically include:
 Term and termination : The framework agreement normally has an undetermined period,
which are subject to automatic renewal unless terminated by written notice. We are
entitled to terminate the framework agreement upon 30-days’ written notice.
 Scope of supply : Our raw material suppliers primarily provide chips, electronic
components and end product materials.
 Product specifications : We specify the product specification, price, quantity, delivery
timeline and other detailed items in each purchase order we send to our suppliers.
 Logistics and risks transfer : The suppliers are typically responsible for the delivery of
raw materials to our designated location specified in each purchase order. The risk
transfers to us after we complete inspection and confirm receipt of the products.
 Payment and credit terms : We are generally granted by our suppliers a credit term of
one to three months following the issuance of a letter of acceptance.
 Quality assurance : Suppliers generally grant a warranty period of one year. In the event
of a quality issue arising during the warranty period, the supplier is obliged to promptly
respond and resolve the issue.
 Product return : We have the right to reject, replace or return products which are
non-conforming with product quality standard, product specifications or quantity with
the order placed.
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EMS Providers
During the Track Record Period, we engaged a group of EMS providers to manufacture our
products and solutions. During the Track Record Period, only two of our EMS providers was
located overseas, and the rest were all domestic companies. EMS providers are companies that
typically offer manufacturing and assembly services for electronic components and products on
behalf of customers. They specialize in production process, such as processing of raw materials,
assembly of PCBs and integration of components into final products. By outsourcing the
resource-intensive manufacturing process to EMS providers, customers like us can focus on
activities such as production design and R&D. During the Track Record Period, we had an
abundant number of EMS providers that closely collaborated with us, and as a result, we did not
rely on any particular EMS provider(s). Salient terms of the supply agreements with our EMS
providers typically include:
 Scope of supply : EMS providers primarily manufacture the hardware in our products and
solutions and provide related manufacturing services to us.
 Term and termination : We typically enter into framework agreement with a term of two
years, which may be automatically renewed unless otherwise terminated by mutual
agreement. The framework agreements set out the general terms and conditions of
cooperation. Individual purchase orders are then executed on an as needed basis.
 Capacity planning and line reservation : We provide EMS providers with estimated
annual production capacity needs based on our business plan annually and release
monthly rolling forecasts to adjust production planning. We also require some of our
EMS providers to reserve manufacturing capacity for a defined period which we may
adjust periodically, primarily to meet the customer’s demand for urgent or additional
orders. We allocate production orders based on EMS provider’s production capacity,
geographic location (to ensure timely delivery to customers), service offer price and
manufacturing and technical capability.
 Pricing and payment terms : Prices are determined based on production complexity,
volume and market conditions, with payments structured through pre-agreed terms. Our
suppliers generally grant us a credit period of 30 to 90 days.
 Logistics : EMS providers are responsible for timely delivery of our products.
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 Quality assurance and warranty : EMS providers must meet our specified quality
requirements and are responsible for liabilities resulting from product defects. EMS
providers typically offer us a warranty period of 18 months from delivery date.
We have implemented a series of measures to prevent infringement on our intellectual
property rights and potential competition during the course of our engagement with EMS
providers. For instance, we only provide our EMS providers with the information needed for the
production of our modules and solutions. Our EMS providers are contractually bound not to
infringe on our intellectual property rights and misuse other proprietary information, and are only
entitled to use underlying intellectual properties for the purpose of the production of our modules
and solutions. During the Track Record Period, we did not experience any material infringement of
our intellectual property rights.
Major Suppliers
In 2022, 2023, 2024 and the nine months ended September 30, 2025, purchases from our five
largest suppliers in each year/period of the Track Record Period were RMB1,159.9 million,
RMB962.3 million, RMB1,720.7 million and RMB1,513.9 million, respectively, representing
57.8%, 53.3%, 63.8% and 56.7% of our total purchase, respectively. In addition, purchases from
our largest supplier in each year/period of the Track Record Period accounted for 37.6%, 26.5%,
34.1% and 34.9% of our total purchases in 2022, 2023, 2024 and the nine months ended
September 30, 2025, respectively. All of our five largest suppliers were Independent Third Parties
during the Track Record Period.
None of our Directors and their respective associates or our Shareholders who hold more than
5% of our total issued Shares had any interest in our five largest suppliers during the Track Record
Period. Additionally, we did not experience any material disputes with our suppliers during the
Track Record Period.
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The following table sets forth the details of our five largest suppliers in each period during
the Track Record Period.
Rank Supplier
Purchase
Amount
Percentage
of total
purchase Type of product/services provided Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For year ended December 31, 2022
1 Supplier A (1) ...... 754,186 37.6 Baseband chip and SoC 100% prepayment 2012
2 Supplier B (2) ...... 246,641 12.3 Baseband chip and memory
chip
60 days 2019
3 Supplier C (3) ...... 67,872 3.4 Memory chip 30 days 2019
4 Supplier D (4) ...... 45,976 2.3 Memory chip 60 days 2020
5 Supplier E (5) ...... 45,199 2.3 Manufacturing services 30 to 90 days 2018
Notes:
(1) Supplier A is one of the subsidiaries of a leading public semiconductor company in U.S., established in Singapore
and engaged in providing wireless technology and services.
(2) Supplier B is a private technology company established in Chinese mainland and Hong Kong, specializing in the
provision of modules and value-added technology services.
(3) Supplier C is a private company established in Hong Kong, engaged in the sales of electronic components,
customized module solutions and technical support services.
(4) Supplier D is a private company established in Hong Kong, engaged in the development and supply of electronic
components, module solutions and technology services.
(5) Supplier E is a private company established in Chinese mainland, engaged in the manufacturing and distribution of
electronic components and customized technology solutions.
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Rank Supplier
Purchase
Amount
Percentage
of total
purchase Type of product/services provided Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For year ended December 31, 2023
1 Supplier A ....... 478,342 26.5 Baseband chip and SoC 100% prepayment 2012
2 Supplier B ....... 339,305 18.8 Baseband chip and memory
chip
60 days 2019
3 Supplier F (6) ...... 56,812 3.1 Memory chip 30 days 2022
4 Supplier G (7) ...... 45,605 2.5 Wave filter and other chips 60 days 2022
5 Supplier E ....... 42,277 2.3 Manufacturing services 30 to 90 days 2018
Notes:
(6) Supplier F is a private company established in Hong Kong, engaged in the provision of computational storage
solutions, memory products and data infrastructure technologies for enterprise and data center applications.
(7) Supplier G is a private company established in Hong Kong engaged in the research, development and supply of
electronic components, intelligent hardware solutions and technology services.
Rank Supplier
Purchase
Amount
Percentage
of total
purchase Type of product/services provided Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For the year ended December 31, 2024
1 Supplier A ....... 920,445 34.1 Baseband chip and SoC 100% prepayment 2012
2 Supplier B ....... 559,415 20.7 Baseband chip and memory
chip
60 days 2019
3 Supplier F ....... 123,909 4.6 Memory chip 30 days 2022
4 Supplier G ....... 62,175 2.3 Wave filter and other chips 60 days 2022
5 Supplier E ....... 54,719 2.0 Manufacturing services 30 to 90 days 2018
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Rank Supplier
Purchase
Amount
Percentage
of total
purchase Type of product/services provided Credit terms
Y ear of
commencement
of business
relationship
(RMB’000) (%)
For the nine months ended September 30, 2025
1 Supplier A ....... 932,905 34.9 Baseband chip 100% advance
payment
2012
2 Supplier B ....... 401,775 15.0 Baseband chip and memory
chip
60 days 2019
3 Supplier F ....... 92,815 3.5 Memory chip 30 days 2022
4 Supplier E ....... 44,114 1.7 Processing services 30 to 90 days 2018
5 Supplier H (8) ...... 42,314 1.6 Memory chip 60 days 2025
Note:
(8) Supplier H is a private company established in Hong Kong, engaged in the international trade of electronic
components for various industries such as automotive electronics, electricity, medical treatment, photovoltaics and
consumer electronics.
IMPACTS OF RECENT REGULATIONS IN RELATION TO TRADE RESTRICTIONS
Recent trade tensions, such as the ongoing U.S.-China trade dispute, have led to tariffs,
export controls and other restrictive measures targeting high-technology goods, semiconductors
and electronics. On February 1, 2025, the U.S. government announced a 10% tariff on all imports
from China (including Hong Kong SAR), citing issues related to fentanyl and other illegal
substances, effective February 4, 2025. China responded by imposing a 15% tariff on certain
imports originating from the United States, among other measures. On March 3, 2025, the U.S.
further imposed a 10% tariff on all imports from China (including the Hong Kong SAR), thereby
increasing the U.S. tariff rate on all imports from China (including the Hong Kong SAR) to 20%,
effective March 4, 2025. On April 2, 2025, the U.S. government issued an Executive Order, which
imposed a 10% baseline tariff on all imports from all U.S. trade partners, effective on April 5,
2025, and individualized higher reciprocal tariffs to certain countries — including 34% on Chinese
goods (including the Hong Kong SAR), effective on April 9, 2025, to counter persistent U.S. trade
deficits.
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On April 8, 2025, such reciprocal tariffs on Chinese goods were increased from 34% to 84%.
On April 9, 2025, the U.S. government introduced a 90-day pause on tariff increases for over 75
countries, excluding China. The U.S. government further amended the reciprocal tariffs to China
(including the Hong Kong SAR) again to 125%.
On May 12, 2025, the United States and the People’s Republic of China issued a joint
statement following their economic and trade discussions in Geneva. Both the United States and
China agreed to a temporary 90-day reduction in tariffs, effective May 14, 2025. During this
period, the U.S. will lower its “reciprocal tariffs” on Chinese goods (including the Hong Kong
SAR) from 125% to 10% by suspending the 24 percentage points of that rate for an initial period
of 90 days. In response, China will reciprocate by reducing tariffs from 125% to 10%. On August
11, 2025, President Trump signed an Executive Order to further extend the suspension of the
additional 24% reciprocal tariffs on Chinese goods, originally set to expire on August 12, for an
additional 90 days until November 10, 2025. On November 1, 2025, the U.S. government
announced that it would maintain the suspension of heightened reciprocal tariffs on Chinese
imports until November 10, 2026, while the currently 10% reciprocal tariff will remain in effect
during this suspension period.
To the best of our knowledge after due inquiry, during the Track Record Period and up to the
Latest Practicable Date, the U.S. tariff applicable to our products were as follows: (i) from 2022 to
January 2025, our modules and solutions were generally subject to U.S. tariff of 7.5%; (ii) from
February to May 2025, the U.S. tariff applied to our modules and solutions rose to up to
approximately 152.5% as a result of the trade tension between the U.S. and China; (iii) Since June
2025 and up to the Latest Practicable Date, the U.S. tariff applied to our modules and solutions
were reduced to generally ranging between 27.5% to 37.5%, as the trade tension eased.
Exports
The recent tariffs implemented by the U.S. on imports from China do not have any material
and adverse impact on our direct and indirect sales to the U.S. for the following reasons:
 We sold few of our products to the U.S. In 2022, 2023, 2024 and the nine months ended
September 30, 2025, revenue from the sales of our products to the U.S. accounted for
4.6%, 3.4%, 7.6% and 8.5% of our total revenue, respectively. Pursuant to our direct
sales agreements and distribution agreements, during the Track Record Period, we were
not responsible for the tariffs imposed by the U.S. on our modules and solutions sold
directly to the U.S.
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Additionally, an increasing proportion of our products sold into the U.S. were produced
and exported by our EMS providers in Vietnam. In 2022, 2023, 2024 and the nine
months ended September 30, 2025, sales of our products produced and exported by our
EMS providers in Vietnam into the U.S. were nil, nil, RMB40.2 million and RMB138.7
million, accounting for nil, nil, 18.1% and 57.7% of our sales into the U.S., respectively.
We did not incur any tariff expenses on the import of our products from our EMS
providers in Vietnam into the U.S. We had also identified potential EMS providers in
Malaysia, Thailand, Cambodia, Japan and Brazil to further mitigate tariff risks.
Given that the revenue contribution from the sales of our products to the U.S. was
limited and some of our products were sold to the U.S. from outside China, the recent
and further increase of tariffs implemented by the U.S. on imports from China will have
limited impact on our business and results of operations as a whole.
 The impact of U.S. tariffs on demand from our customers is limited . During the Track
Record Period and up to the Latest Practicable date, we had not experienced any
material adverse changes in the order volume, price, payment, product exchange
requests or logistic arrangements related to the sales of our modules and solutions to the
U.S. as a result of U.S. tariffs. On the contrary, our overseas revenue increased by
69.2% from RMB569.0 million for the nine months ended September 30, 2024, to
RMB962.9 million for the nine months ended September 30, 2025, among which,
revenue from the U.S. increased by 95.5% from RMB122.9 million for the nine months
ended September 30, 2024, to RMB240.2 million for the nine months ended September
30, 2025. After taking tariffs into account, we still believe that our revenue generated
from the U.S. will increase in the future, because: (i) a portion of our modules and
solutions sold to the U.S. are manufactured in Vietnam, which partially mitigates the
impact of U.S. tariffs; (ii) we expect the scale of our cooperation with our existing
customers in the U.S. in the IoT and wireless broadband sectors to expand steadily,
driven by the growing demand for smart modules and solutions in the IoT industry and
the growing demand for 5G data transmission modules and solutions in the wireless
broadband industry; (iii) we continue to strengthen our market expansion efforts in the
U.S., such as by participating in Consumer Electronics Show.
 We were generally not responsible for the U.S. tariffs on the modules and solutions we
sold to customers . During the Track Record Period and up to the Latest Practicable
Date, we were not responsible for the U.S. tariffs on the modules and solutions we sold
to customers, because for the orders subject to U.S. tariffs, the agreed trade terms
included in our agreements with customers are mainly Ex Works, Free Carrier, Free on
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Board and Cost, Insurance and Freight. In accordance with international trade rules,
under these trade terms, the obligation to pay import duties and tariffs is borne by the
importer, rather than the exporter.
The Sponsor is of the view that the U.S. tariffs are not reasonably expected to have a material
adverse impact on the Group’s operations or financial performance. This assessment is based on (i)
the Group’s limited revenue exposure to the U.S. market; and (ii) the Company’s explanation on
contractual allocations under the Group’s direct sales and distribution agreements pursuant to
which, during the Track Record Period, the Group was not responsible for U.S. tariffs on modules
and solutions sold directly into the U.S.
During the Track Record and up to the Latest Practicable Date, our modules and solutions
were generally not subject to tariffs imposed by other countries to which our modules and
solutions were exported.
Imports
The tariffs imposed by China on imports of U.S. origin do not have a material adverse impact
on our business and results of operations for the following reasons:
 Our reliance on U.S. suppliers and raw materials of U.S. origin was limited . We
structured our supply chain to minimize our reliance on U.S. suppliers and raw materials
of U.S. origin. Most of our five largest suppliers in each period during the Track Record
Period are distributors or manufacturers in the electronics industry and are based outside
U.S. Most of the raw materials we procured were not of U.S. origin. Subject to the
interpretation of the “U.S. origin” of these raw materials under the new tariff regime, we
may incur additional costs in these purchases going forward. However, competitive
alternatives to the raw materials of U.S. origin are readily available with competitive
pricing supplied by domestic suppliers and we have established close business
relationship with these suppliers during the Track Record Period. We also plan to further
diversify our supplier base to reduce exposure to any regional or geopolitical risks and
collaborate with high-quality global suppliers to ensure the resilience and efficiency of
our supply chain. Accordingly, we do not expect tariffs and other export restrictions
between China and the U.S. to pose a material adverse impact on our procurement and
business operations.
 We sourced few raw materials of U.S. origin . In 2022, 2023, 2024 and the nine months
ended September 30, 2025, our purchase of raw materials of U.S. origin was RMB9.5
million, RMB9.3 million, RMB8.8 million and RMB8.9 million, accounting for 0.5%,
0.5%, 0.4% and 0.4% of our cost of sales, respectively. Additionally, during the Track
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Record Period and up to the Latest Practicable Date, the raw materials we procured of
U.S. origin, primarily including microcontroller units and power amplifiers, were
exempt from tariffs imposed by China on imports of U.S. origin. We did not procure any
raw materials that were restricted from exports from the U.S. into China.
The semiconductor raw materials we procured of U.S. origin may be subject to tariffs due to
changes in the China tariff regime. Due to the globalized nature of semiconductor production, a
semiconductor can be manufactured and assembled in different countries and regions. According to
the General Administration of Customs regulations, the country of origin for integrated circuits is
determined based on the four-digit tariff code change principle. On April 11, 2025, the China
Semiconductor Industry Association (CSIA) issued Notice on Rules for Determining Country of
Origin for Semiconductor Products, suggesting that for integrated circuits customers declarations,
the country of origin should be determined based on the location of the wafer fabrication plant.
As a result, subject to the interpretation of the “U.S. origin” of these raw materials under the
new tariff regime, we may incur additional costs in these purchases going forward.
While the ultimate determination of “U.S. origin” and future policy adjustments could affect
tariff applicability and costs, the Group’s diversified sourcing strategy and supplier optionality
provide substantive mitigation. On this basis, the Sponsor is of the view that Chinese tariffs on
U.S.-origin imports are not reasonably expected to have a material adverse impact on the Group’s
operations or financial performance.
Mitigating Measures
In response to the potential impact of the tariff policies and other trade restrictions, we have
implemented a series of mitigating measures.
 Diversify the source of raw materials . We had used and plan to increase the use of
domestically sourced raw materials as alternatives to the raw materials of U.S. origin we
procure and use in our modules and solutions, thereby minimizing the risk of increased
tariffs and other adverse trade restrictions on our supply chain and facilitating a stable
and resilient production schedule of our modules and solutions.
 Diversify our collaboration with EMS providers . To mitigate the impact of tariff
policies and other trade restrictions, we had collaborated with EMS providers and
maintained a pool of potential EMS providers located in jurisdictions not subject to
significant tariff or other trade restrictions risks. Additionally, we plan to engage EMS
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providers with factories located in comprehensive bonded zone in China to mitigate any
potential trade restrictions on the import of raw materials and export of finished
products.
LOGISTICS AND INVENTORY MANAGEMENT
Based on the distance between our EMS providers and the locations specified by our
customers and the expected delivery time required by our customers, we generally arrange logistics
through qualified third-party logistics service providers to deliver our products and solutions from
the manufacturing facilities of our EMS providers to the locations specified by our customers. We
conduct regular evaluations of these third-party logistics providers to ensure efficient delivery of
our products and solutions and compliance with our quality standards. To the best of our
knowledge, during the Track Record Period, all of our third-party logistics service providers were
Independent Third Parties.
We place high importance on our inventory and turnover health. We maintain a safety stock
level to prepare for unexpected increase in demand or delay, shortage in supply and assign
dedicated personnels in our supply chain team to monitor inventory and provide reports to our
management team for review. We conduct comprehensive inventory checks every three months and
perform spot checks periodically to ensure efficient warehouse operations. We also carry out
annual on-site inventory audits and inspections, during which inventory inspection reports are
prepared. These reports guide the timely management of obsolete and slow-moving inventories. We
also proactively track market condition change and pre-order and stockpile in advance strategic
raw materials, primarily including baseband chips, SoC chips, memory chips and PCBs, in
anticipation of potential supply shortage. Our Directors are of the opinion that our inventory
control systems and policies have been effective, with no significant supply shortages or inventory
overstock issues experienced during the Track Record Period and up to the Latest Practicable Date.
QUALITY CONTROL
Quality control and assurance is critical to our operation. We are committed to maintaining
high quality across our products and solutions. Our comprehensive quality management system
encompasses full lifecycle quality control, covering research and development, production, testing,
delivery and after-sales service to ensure compliance with both relevant regulatory requirements
and our internal quality standards.
We have established a structured quality governance framework, with our general manager
acting as the chief decision-maker overseeing the quality management strategy, to ensure that the
management system is established, implemented and maintained in accordance with the quality
control standards. Provide the necessary resources and approve quality objectives. The
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management team is responsible for the establishment, implementation and effective maintenance
of the quality control system. We have also established a quality control team that works closely
with all departments to enforce quality control measures, conduct performance evaluations and
ensure compliance.
Certifications
We adhere to globally recognized quality and environmental management standards, ensuring
that our products and operations comply with the highest industry benchmarks. We have obtained
ISO 9001, IATF16949, ISO 14001 and ISO 45001 certifications, covering R&D, supply chain
management and customer service, which systematically enhance our operational quality and risk
management capabilities.
R&D Activities
Our R&D quality control framework follows a structured and systematic approach,
integrating comprehensive risk assessment and validation measures throughout the entire product
lifecycle. We adopt an integrated project delivery framework, ensuring that quality is embedded
from product ideation to market release.
We integrate quality control into every stage of R&D to ensure that our products and
solutions are designed, tested and validated to meet performance and reliability standards. During
the project initiation phase, we conduct market research, regulatory research, customer outreach
and feasibility studies to align new products with customer demands. In the specification and
design stage, we define product specifications, technical architectures and manufacturing
feasibility to ensure smooth downstream execution. The validation phase focuses on hardware and
software integration and prototype testing, reducing potential defects before mass production. Even
after commercialization, we maintain lifecycle quality tracking, analyzing customer feedback and
performance data to drive cost optimization and continuous improvements.
Supply Chain Quality Control
To ensure that externally provided processes, products, and services meet requirements, we
have established a robust supplier management and control procedure. All suppliers are required to
comply with the ISO 9001 quality management system, and suppliers providing automotive
products and services are expected to meet or aim to achieve compliance with the IATF 16949
quality management system. We conduct supplier reviews and evaluate potential suppliers based on
product conformity, technical and manufacturing capabilities, quality and delivery performance,
and compliance status. Only materials from suppliers who pass our rigorous qualification process
are approved for use.
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During the Track Record Period and up to the Latest Practicable Date, (i) we had not
received any material complaints relating to product quality; and (ii) we had not experienced any
product recalls or accidents due to product defects.
Product Testing
Our finished products undergo comprehensive quality inspections prior to shipment to ensure
their functionality, performance, durability and compliance with international standards and
specific customer requirements. Our hardware testing verifies circuit integrity, system stability and
structural durability and our software testing assesses feature completeness, software reliability
and user experience. Reliability testing simulates real-world operating conditions to evaluate
long-term product performance.
We also ensure that all products meet applicable international certification standards,
including environmental substance testing and regulatory approvals for target markets, to facilitate
smooth entry into global markets. Through a systematic approach to product testing, we ensure
that our products and solutions consistently meet our stringent quality benchmarks before delivery
to customers.
Customer Services
To respond promptly to customer requirements, we ensure that all service personnel are
equipped to deliver the designated services and are supported by effective tools and measuring
equipment that meet the relevant service demands. This includes on-site support, repair services
and other services based on our service standards.
INFORMATION SECURITY AND DATA PRIV ACY
We believe the confidentiality, integrity and availability of data is vital to our business
operations. In recent years, data security and privacy protection has become a global regulatory
priority, with cybersecurity, data security and personal information protection laws in the PRC
undergoing rapid development. Given that we only enter into transactions with enterprises, we do
not collect or process personal information or data from individual consumers. However, in the
course of our business, we collect, store and process business data and transaction data, which are
subject to evolving regulatory requirements and administrative oversight. Our operations do not
involve any cross-border data transfer and we do not store any data overseas. As advised by our
PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable Date, we had
not been subject to any material fines, administrative penalties, or other sanctions from relevant
regulatory authorities for violations of data privacy and security laws and regulations. We do not
deploy public, private or state-owned cloud on our modules and solutions.
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To ensure data integrity, confidentiality and security and mitigate data security risks, we have
developed a comprehensive information security management system that includes stringent data
encryption, secure data storage protocols and strict transmission policies to ensure the
confidentiality and integrity of sensitive information.
Our internal data protection framework is designed to manage and control access to
confidential information effectively. We have established clear and detailed protocols that govern
the use, storage and sharing of corporate data, ensuring that only employees with the appropriate
authorization can access sensitive information on a need-to-know basis. Employees are granted
access to data strictly according to their roles and are required to use this data solely for the
performance of their job duties.
Our employees are required to sign confidentiality agreements as part of their employment,
which strictly prohibit the unauthorized disclosure of any company-related confidential
information. This policy ensures that our employees understand the critical nature of safeguarding
company data and are held accountable for maintaining confidentiality.
To safeguard against data loss, we have implemented a backup system that stores key data in
multiple locations. We ensure that backup copies are stored both locally and remotely and
regularly test our data restoration processes to ensure the reliability of our backup system. In
addition, we have established a remote disaster recovery protocol to protect against potential
system failures or catastrophic events. Multiple backup copies of data are stored across different
locations, ensuring that data can be quickly restored in the event of any technical issues, natural
disasters, or unforeseen circumstances.
During the Track Record Period, we did not experience any breach of confidential
information of users or any other user information related incidents which could cause a material
adverse effect on our business, financial condition or results of operations. We remain committed
to enhancing data security, strengthening compliance with evolving regulations and investing in
cybersecurity technologies to mitigate potential risks and maintain the highest standards of data
protection.
As advised by our PRC Legal Advisor, during the Track Record Period and up to the Latest
Practicable Date, we had not been subject to any material fines, administrative penalties, or other
sanctions from relevant regulatory authorities for violations of data privacy and security laws and
regulations.
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INFORMATION TECHNOLOGY SYSTEM
Our information technology systems are integral to our operational efficiency, data security
and business continuity. We have developed a comprehensive information technology infrastructure
aligned with our organizational structure, business scope and technological capabilities. To ensure
reliability, security and efficiency, we continuously refine information technology management
policies, standardize software and server management and enforce strict access control measures.
We conduct regular system updates, data backups and cybersecurity checks to enhance system
stability and prevent potential disruptions. During the Track Record Period and up to the Latest
Practicable Date, we had not experienced any material information technology system failure or
downtime that had a material adverse effect on our business operations.
COMPETITION
The global wireless communication module industry in which we operate is highly
competitive and characterized by rapid technological evolvement, fast changes in customer
demands and preferences, frequent introduction of new products and solutions and constant
emergence of new industry standards and practices. In addition, the global wireless communication
module industry is marked by a high level of concentration. We compete with other players in the
industry whose businesses include sales of modules and solutions. Please see “Industry Overview.”
Leveraging our strength in the technology and innovation of our product portfolio, long-term
stable customer base and growth in downstream application sectors, we believe we are
well-prepared to further penetrate the market, captivate on the growth potential of wireless
communication module industry and remain at the forefront. Nevertheless, we operate in a highly
competitive industry. Failure to compete effectively could negatively and adversely affect our
business operations, market share and profitability. For further details, please see “Risk Factors —
Risks Relating to Our Business and Industry — The industry in which we operate is highly
competitive. If we fail to compete against other market players, our business, financial condition
and results of operations may be materially and adversely affected.”
EMPLOYEES
Substantially all of our employees are based in the PRC during the Track Record Period. The
table sets forth a breakdown of our employees by function as of September 30, 2025.
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Function Number
Percentage of
Total
%
R&D and technology ................................ 807 83.4
Sales and marketing ................................ 95 9.8
Finance .......................................... 17 1.8
Administrative ..................................... 49 5.1
Total ............................................ 968 100.0
Recruitment and Human Resource Management
We highly value the potential of our employees and have invested substantial efforts and
resources in recruiting and training our employees. Our success hinges on our ability to attract,
retain and motivate qualified talents and we believe that our high-quality and diverse talent pool is
one of our core strengths. We recruit employees through various methods including campus hiring,
online recruitment and external recruitment channels to meet our talent demands across different
functions. In addition to regular recruitment program through specialized recruiting firms and other
third parties, we have also implemented internal referrals policy to attract potential talents to join
us.
We offer competitive compensation and benefits to attract and retain top talents. In addition
to base salaries, we provide performance-based bonuses and long-term incentive plans for eligible
employees. We also conduct regular performance evaluations and offer merit-based promotions and
salary adjustments to reward outstanding employees.
We value the long-term benefits of talent cultivation and provide internal training programs
to our employees periodically to enhance their technical know-how and solidate their knowledge
and expertise for the industry.
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Employee Training and Development
We are committed to enhancing employee capabilities through a structured training and
development system. We develop training plans based on business development and organizational
strategic needs, focusing on the knowledge and skills required for each position. Training is
provided through internal or external programs to meet job requirements. External training may
involve hiring experienced external instructors for specialized topics such as tax law, logistics and
customs clearance.
Employment Contract and Employee Benefits
We enter into standard employment agreements and confidentiality agreements with all
full-time employees and sign noncompetition agreements with key management personnel and
professionals. These agreements typically include confidentiality obligations effective during and
after employment and noncompetition provisions effective during and up to two years after
termination of employment.
As required by laws and regulations in China, we participate in various government statutory
employee benefit plans, including social insurance plans, namely pension, medical, unemployment,
work-related injury and maternity insurance plans and housing provident funds. As of the Latest
Practicable Date, we had not been subject to any fines or administrative penalties imposed by any
regulatory authorities due to non-compliance regarding social insurance and housing provident
funds.
None of our employees are currently represented by labor unions. We believe that we
maintain good working relationships with our employees and we have not experienced any
material labor disputes, strikes, protests or any difficulty in recruiting staff for our operations
during the Track Record Period and up to the Latest Practicable Date.
Failure to Make Full Contributions to Social Insurance and Housing Provident Funds
We are also required to participate in the employee social welfare plan administered by local
governments. Such plan consists of pension insurance, medical insurance, work-related injury
insurance, maternity insurance, unemployment insurance and housing provident fund. The amount
we are required to contribute for each of our employees under such plan should be calculated
between the minimum and maximum level as from time to time prescribed by national laws and
regulations and local authorities. During the Track Record Period, we and certain of our PRC
subsidiaries did not make full contributions to social insurance and housing provident fund for all
employees in accordance with the Regulations on Administration of Housing Provident Fund ( И
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၍ଣૢԷ) and the Social Insurance Law of the PRC (),
because certain employees were not willing to pay the social insurance and housing provident
funds in full as it requires additional contributions from these employees.
As advised by our PRC Legal Advisor, pursuant to relevant PRC laws and regulations, if we
fail to make social insurance contributions in compliance with the relevant PRC laws and
regulations in the future, we may be required to pay all outstanding social insurance contributions
within a prescribed period, with late fees at a daily rate of 0.05% of the outstanding amount,
accruing from the date when the outstanding social insurance contributions are due. If this
payment is not made within the stipulated period, the competent authority may further impose a
fine of one to three times of the overdue amount on us. In 2022, 2023 and 2024 and the nine
months ended September 30, 2025, the amount of shortfall in social insurance was RMB31.9
million, RMB31.7 million and RMB31.9 million and RMB24.8 million, respectively. In addition,
pursuant to relevant PRC laws and regulations, in case of a failure to pay housing provident fund
in full, the relevant housing provident fund management center may require us to pay the
outstanding amount within a prescribed period. If the payment is not made within such time limit,
an application may be made to the PRC courts for compulsory enforcement. In 2022, 2023 and
2024 and the nine months ended September 30, 2025, the amount of shortfall in housing provident
fund contributions was RMB7.2 million, RMB7.8 million and RMB7.6 million and RMB6.9
million, respectively.
On September 21, 2018, the Ministry of Human Resources and Social Security of the PRC
issued the Urgent Notice on Enforcing the Requirement of the General Meeting of the State
Council and Stabilization the Levy of Social Insurance Payment (஫࿏ໝྼ਷ਕ৫੬ਕึᙄ
 ). This notice promotes the reduction of social
insurance contributions by companies to avoid overburdening enterprises and prohibits local
authorities from requiring enterprises to make up for historically underpaid or unpaid social
insurance contributions in one go.
If the relevant authorities order us to fully contribute the social insurance and/or housing
provident funds, we would make full contributions and take rectification measures as soon as
possible within the specified period. As of the Latest Practicable Date, no penalty had been
imposed by the relevant regulatory authorities with respect to our social insurance and housing
provident fund contributions. As advised by our PRC Legal Advisor, based on the above, the
likelihood that the relevant social insurance and housing provident fund authorities would take
initiative to recover the historically unpaid social insurance and housing provident fund from us or
impose material administrative penalties on us due to our failure to provide full social insurance
and housing provident fund contributions for our employees is remote.
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According to the Interpretation II by the Supreme People’s Court of the PRC on Legal Issues
in the Trial of Labor Dispute Cases (༆
ᙑ(ɚ)) (the “ Interpretation ”) as promulgated by the Supreme People’s Court on July 31, 2025
and became effective on September 1, 2025, if the employer and its employee agree or the
employee undertakes that social insurance contributions need not be paid, the People’s Court shall
deem such agreement or undertaking invalid. Furthermore, where the employer fails to pay social
insurance contributions in accordance with the applicable laws, and the employee seeks to
terminate the labor contract and claims economic compensation from the employer pursuant to the
Labor Contract Law of the PRC, the People’s Court shall support such claims.
Our Directors are of the view that the Interpretation would not have a material adverse effect
on our business operations and financial position, based on the following considerations: (i) as
further advised by the PRC Legal Advisor, the Interpretation does not expand penalty exposure or
repeal existing laws, and upon its implementation, the likelihood that the relevant competent
authorities would collectively seek to recover the historically unpaid social insurance and housing
provident funds from us and/or impose administrative penalties on us still remains remote; and (ii)
any shortfall in social insurance and housing provident fund contributions, regardless of the reason
(including cases resulting from employees’ voluntary waiver of such contributions), has been
included in our shortfall calculation.
We have enhanced our internal control measures with respect to social insurance and housing
provident fund requirements, including (i) designating our human resources department to review
and monitor the reporting and contributions of social insurance and housing provident fund on a
regular basis; (ii) monitoring closely any updates of the laws, regulations and policies from time to
time so as to ensure that we can respond to any changes with respect to social insurance and
housing provident fund requirements; and (iii) consulting our PRC Legal Advisor for advice on
relevant PRC laws and regulations to keep us abreast of relevant regulatory developments. In
addition, we have obtained confirmations from relevant local authorities that, in respect of the
relevant periods stated therein, no administrative penalties had been imposed due to
non-compliance regarding social insurance and housing provident funds. We undertake to make
timely payments for the deficient amount and overdue charges, as soon as requested by the
competent governmental authorities.
INSURANCE
Pursuant to PRC social insurance regulations, we provide social insurance including pension
insurance, unemployment insurance, work-related injury insurance, maternity insurance and
medical insurance for our employees based in China.
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We also maintain insurance policies to cover various aspects of our business, including
property loss and damage, to safeguard our business continuity. In line with general market
practice, we do not maintain any business interruption insurance, insurance policies covering
damages to our network or information technology systems, or key man life insurance. We
regularly review our insurance policies to ensure compliance with statutory requirements. We
believe that our existing insurance coverage is adequate for our operations and aligns with industry
standards.
During the Track Record Period, we were not subject to any material claim of insurance.
However, we may still be exposed to potential claims and liabilities exceeding our insurance
coverage. For further details, please see “Risk Factors — Risks Relating to Our Business and
Industry — Our insurance coverage may not be sufficient to cover all losses or potential claims by
our customers, which would affect our business, financial condition and results of operations.”
PROPERTIES
As of the Latest Practicable Date, we owned 12 properties with an aggregate GFA of
approximately 1,008.19 sq.m.in China and leased eight properties with an aggregate GFA of
approximately 8,525.11 sq. m in China.
Owned Properties
As of the Latest Practicable Date, we owned 12 units across China, with an aggregate GFA of
approximately 1,008.19 sq. m., which were mainly used as employee dormitories and not related to
our ordinary course business operations. These units were acquired pursuant to arrangements with
the Housing Bureau of Bao’an District, Shenzhen (namely, the Shenzhen Bao’an District
Enterprise Talent Public Rental Housing Sale and Purchase Contract ଉέ̹ᘒτਜΆุɛʑʮ΍
൯ርΥΝ), and are subject to policy-based restrictions on transfer, lease and mortgage.
Consequently, as of the Latest Practicable Date, we have not obtained the property ownership
certificates in respect of these units. Our Directors are of the view that the absence of full
ownership and property ownership certificates aligns with the relevant government policies and is
not expected to have any material adverse effect on our business operations. As of the Latest
Practicable Date, as advised by our PRC Legal Advisor, we have not been subject to any
administrative penalty as a result of such absence.
Lease Properties
As of the Latest Practicable Date, we leased eight properties in China, with an aggregate
GFA of approximately 8,525.11 sq. m., which were mainly as our office space. As of the Latest
Practicable Date we had not received real estate ownership certificates or proof of authorizations
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from lessors of three of our leased properties proving their right to lease those properties to us.
Our leases generally have a term ranging from three to six years. We are generally allowed to
terminate lease agreements with a prior notice, which provides us with operational flexibility,
albeit usually at the cost of forfeiting deposits and/or paying a termination fee. We believe that
there is sufficient supply of properties in Chinese mainland and we do not rely on the existing
leases for our business operations. We believe that our current facilities are adequate to meet our
current needs.
Pursuant to the applicable PRC laws and regulations, property lease agreements shall be
registered with the relevant local branches of the PRC Ministry of Housing and Urban-Rural
Development. As of the Latest Practicable Date, we had not completed lease registration for eight
of the properties we leased in China.
Property Valuation
As of the Latest Practicable Date, no single property interest forming part of our Group’s
property activities had a carrying amount of 1% or more of our total assets and we had no single
property with a carrying amount of 15% or more of our total assets and on this basis, we are not
required by Rule 5.01A of the Listing Rules to include in this document any valuation report.
Pursuant to section 6(2) of the Companies (Exemption of Companies and prospectuses from
Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong), this prospectus is
exempted from compliance with the requirements of section 342(1)(b) of the Companies (Winding
Up and Miscellaneous Provisions) Ordinance in relation to paragraph 34(2) of the Third Schedule
to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, which requires a
valuation report with respect to all of our interests in land or buildings.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Overview
We are committed to social responsibility and recognize the fundamental importance of
Environmental, Social and Governance (“ ESG”) factors in our path towards sustainable
development. Our primary goal is to generate and amplify a positive impact on our employees,
customers, and business partners. Simultaneously, we are dedicated to enhancing our
environmental accountability and our role in the public sphere.
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To ensure compliance with applicable laws and regulations, from time to time, our Board of
Directors periodically reviews our policies and, if needed, makes adjustments to accommodate
substantial modifications in labor and workplace safety regulations. The board also ensures policy
implementation aligns with our mission. Each department reports to senior management, ensuring
ESG considerations are prioritized across all levels, reflecting industry best practices.
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any material administrative penalty in relation to health, work safety, social and
environmental protection.
ESG Governance
We are committed to integrating ESG principles into our corporate strategy and daily
operations. To enhance decision-making effectiveness and governance efficiency, we have
established a structured ESG governance framework that aligns with our long-term development
strategy. Our ESG governance structure consists of three levels, strategic, policy, and execution,
covering our ESG working group, each with distinct roles and responsibilities, ensuring effective
implementation of ESG initiatives.
 Strategy Level : ESG working group, comprised of a number of staff under our
integrated management center, is responsible for formulating overarching ESG
objectives, reviewing and approving major ESG-related decisions, and ensuring ESG
considerations are integrated into our business strategy. The Company has appointed
senior management personnel in charge of leading the ESG working group, providing
unified leadership and ensuring that ESG initiatives are aligned with the Company’s
priorities. In practice, the Company’s ESG-related affairs are overseen by integrated
management center, which coordinates cross-functional ESG matters and supports the
ESG working group in executing its ESG responsibilities. This structure ensures that our
sustainability governance has clear leadership, centralized oversight, and organizational
continuity.
 Policy Level : The ESG working group is responsible for formulating ESG-related
policies and monitoring performance across environmental, social, and governance
dimensions. Its key functions include conducting thematic studies on material ESG
issues, proposing ESG development goals, identifying governance challenges. On the
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environmental side, we have established a policy framework covering emissions
management, waste handling, resource utilization, and environmental risk control. Core
policy documents include:
green gas emissions control procedure (છՓ೻ҏ ), addressing
greenhouse gas management through administrative measures (for instance,
lights-off, paperless office, low-carbon commuting);
water management procedure (၍ଣ೻ҏ ), standardizing hazardous and
non-hazardous waste classification, minimization targets, and treatment protocols;
resources and energy management procedure ( ༟๕ঐ๕၍ଣ೻ҏ ), focusing on
energy and water efficiency across office operations and project sites;
environmental operations management procedure ( ᐑྤ༶Б၍ଣ೻ҏ ) hazard
identification and risk assessment control procedure (ᎈ൙ᄆછՓ
೻ҏ), providing a structured evaluation of environmental and climate-related risks,
including impact assessments and mitigation actions.
Our manufacturing is outsourced and does not involve direct emissions or material
greenhouse gas discharge; thus, its environmental footprint is minimal. Nevertheless, we
have adopted precautionary controls and regulatory-compliant practices.
 Execution Level : The ESG working group is responsible for executing ESG-related
tasks and ensuring the implementation of ESG policies at the operational level. The
working group organizes ESG coordinates company-wide ESG initiatives to ensure
compliance with corporate sustainability goals. Through internal policies and operating
procedures, the working group ensures that we meet our sustainability commitments
while maintaining compliance with national environmental laws. Its functions also
include stakeholder communication, ESG data collection, and report drafting, thereby
providing critical execution support for the our ESG strategy.
We are dedicated to improving ESG awareness within our organization. Through targeted
training programs, we ensure that all employees, including senior management and directors,
understand ESG-related responsibilities and best practices. We conduct ESG training sessions to
enhance corporate-wide capabilities in sustainability governance, risk management, and
compliance with ESG standards. We ensure that all business units fully understand and implement
ESG strategies through targeted training and internal coordination. We will continue to refine our
ESG governance mechanisms to improve decision-making quality and enhance governance
effectiveness.
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ESG-related Risk Identification and Assessment
We place a high priority on developing our risk management system and have established a
structured ESG risk identification, assessment, and management framework to enhance our ability
to anticipate, evaluate, and mitigate environmental, social, and governance-related risks. Given the
nature of our business, where all product manufacturing is outsourced, we do not generate material
emissions or hazardous waste, and our direct environmental impact remains minimal. Nonetheless,
we monitor environmental and climate-related risks that may impact our business, strategy, and
financial performance as our key agenda.
Technology Risks & Opportunities: We face technology upgrade risks associated with
rapidly evolving cellular and AI module standards such as 5G-A and AI edge computing. To
mitigate such risks and capture opportunities, we actively invest in R&D for high-performance
smart modules, and cooperate closely with SoC and operating system platform providers to ensure
early access to next-generation technologies.
Reputational Risks: Reputational risks may arise from data security breaches in certain
applications such as ICVs and industrial IoT. We have established internal data handling protocols
and ISO 27001-compliant information security practices to reduce such risks.
Environmental and Climate-related Risks: Although our operations are not
carbon-intensive, climate-related transition risks may arise from client expectations, regulatory
changes and green supply chain requirements.
Risk Identification and Management Framework: We identify and manage risks through a
three-tier governance framework, led by the Board and assisted by senior management. Risks are
reviewed quarterly based on their likelihood and impact across short-, medium- and long-term
horizons.
Impact on Business, Strategy and Financial Performance: Failure to address key ESG and
technical risks may impact our customer retention and product competitiveness. Proactive ESG and
climate governance supports our access to global markets and enhances customer trust, particularly
in the automotive and industrial sectors.
Under the supervision of the Board and with strategic coordination by the integrated
management center, we have established a structured ESG risk management mechanism. This
includes internal assessments led by the ESG working group, as well as external stakeholder
consultations to ensure a comprehensive understanding of potential risk exposures.
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Our risk identification and assessment process integrate multiple dimensions:
 Regulatory compliance : We conduct regular reviews of national and local environmental
regulations, ESG disclosure requirements, and industry best practices. Internal audits
and cross-departmental evaluations help ensure our operations remain compliant with
evolving standards. Despite our low direct environmental impact, we implement
precautionary controls related to waste disposal, energy conservation, and emissions
management;
 Strategic and operational risk mapping : We assess risks arising from climate volatility,
data privacy, labor standards, and supply chain stability. Our business continuity
planning integrates ESG scenarios such as policy tightening or reputational risks linked
to environmental negligence. Operationally, we promote energy-saving behavior and
proper waste handling to reduce underlying exposure;
 Stakeholder engagement : We regularly engage employees, suppliers, customers,
investors, and regulatory authorities to gather feedback on ESG-related concerns.
Internal training programs and external questionnaires are used to assess awareness gaps
and risk perception. This feedback helps align our ESG priorities with stakeholder
expectations;
 Integration into corporate governance : ESG risks are incorporated into our
enterprise-wide risk management and strategy-setting processes. Identified risks are
reviewed by senior management and addressed through clear delegation and
performance accountability. This ensures that ESG factors support operational resilience
and long-term business value creation.
Strategies Addressing ESG-Related Risks
We have implemented various internal policies to manage and mitigate ESG-related risks,
ensuring compliance with regulatory requirements and alignment with industry best practices. Our
ESG risk management framework is designed to proactively identify, assess, and address potential
risks, integrating environmental, social, and governance considerations into our overall business
strategy.
 Regulatory Compliance and ESG Monitoring : We regularly review and assess ESG
reports from comparable industry peers to ensure the timely identification of emerging
ESG-related risks. We continuously monitor regulatory developments and update
internal policies and management processes to maintain compliance with evolving
environmental and governance requirements.
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 Environmental Risk Management : As a company that does not have its own
manufacturing facility, our direct environmental impact is limited. Nevertheless, we
have established formal controls through our Waste Management Procedure and
Greenhouse Gas Emissions Control Procedure to manage environmental and
climate-related risks arising from office operations and upstream production partners.
Although our greenhouse gas emissions remain low, we continue to monitor
environmental trends and apply our Hazard Identification and Evaluation Control
Procedure to identify potential climate-related risks. Based on identified risk levels,
targeted mitigation measures are implemented and integrated into operational planning
and staff training programs.
 Supply Chain and Third-Party Environmental Responsibility : We implement strict ESG
standards across our supplier base to manage environmental and social risks in our value
chain. In accordance with the Supplier Management Procedure , we conduct ESG due
diligence before onboarding new suppliers, requiring signed commitments to corporate
social responsibility, hazardous substance control, and environmental compliance. In
2023, all new suppliers signed the required agreements, and we conducted ESG audit to
suppliers. We also perform regular documentation reviews and, where appropriate,
conduct independent third-party testing to validate supplier compliance. These measures
ensure our upstream partners operate in accordance with environmental requirements
and reduce the risk of supply chain-related ESG incidents.
Goals, Measures, and Targets
Our ESG working group has established a quantitative target KPI at the beginning of each
financial year and implemented structured measures to manage and mitigate the environmental,
social, and climate-related risks identified through our ESG risk assessment process. Our approach
aims to balance business growth with sustainability, ensuring compliance with regulatory
requirements while enhancing resource efficiency and minimizing environmental impact. Our
quantitative targets for 2025 include achieving zero major safety incidents as defined by
regulations, and zero environmental incidents.
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Environmental and Energy Management Goals
We are committed to reducing energy consumption, optimizing resource utilization, and
minimizing carbon emissions. Our energy management strategy focuses on enhancing energy
efficiency in office operations, promoting low-carbon initiatives, and implementing advanced
energy-saving technologies. We continuously monitor and analyze energy consumption trends to
improve operational efficiency and reduce environmental impact. To achieve our goal, we have in
place the following measures:
 Implement energy conservation training and awareness programs to encourage
employees to adopt sustainable practices.
 Reduce overall electricity consumption intensity (mWh per million revenue) by
optimizing energy use in office operations.
 Enforce strict air-conditioning and lighting control policies, conduct regular inspections
to prevent energy waste, and implement peak-hour electricity reduction strategies.
Water Resource and Waste Management
We place great importance on the conservation of water resources and the proper management
of waste. We strictly comply with national environmental regulations and actively promote
initiatives that improve water use efficiency and waste disposal practices, including:
 Source all water supply from municipal sources, with no significant direct or indirect
impact from water extraction, consumption, drainage, or storage changes.
 Actively promote employee awareness campaigns on water conservation, conduct
facility inspections to prevent leaks, and optimize water usage efficiency in office
operations.
As we do not engage in manufacturing activities, our operations do not generate hazardous or
non-hazardous waste in the ordinary course of business. We continue to follow general principles
of source reduction, reuse and responsible disposal for office-related waste to minimize our
environmental footprint.
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Monitoring Indicators
The following table sets forth certain of our environmental and climate indicators arising
from our business operations during the Track Record Period.
For the year ended December 31,
For the nine
months ended
September 30,
2022 2023 2024 2025
GHG emission
Scope 1 emissions (tons of
CO2e)(1) .................... 32.4 30.7 27.5 21.2
Scope 2 emissions (tons of
CO2e)(2) .................... 682.2 677.5 645.8 518.5
Scope 3 emissions (tons of CO 2e)(3) 248.5 396.7 417.5 332.4
Total GHG emission (tons of
CO2e)...................... 963.1 1,104.9 1,090.8 872.1
Electricity consumption
Total electricity consumption
(MWh) ..................... 1,271.3 1,091.8 1,132.9 909.6
Water consumption
Total water consumption (tons) .... 5,748.0 4,830.0 4,968.0 3,222.0
Notes:
(1) Scope 1 emissions refer to direct GHG emissions primarily from the consumption of direct energy in our
operations, namely the fuel consumed by our vehicles.
(2) Scope 2 emissions refer to indirect GHG emissions primarily from the consumption of electricity at our office
spaces.
(3) Scope 3 emissions refer to indirect GHG emissions primarily from activities associated with products and services
across the value chain.
During the Track Record Period, our total GHG emission and our total electricity
consumption decreased, primarily because of our continued efforts in optimizing energy use
efficiency.
Our total water consumption decreased from 5,748.0 tons in 2022 to 4,830.0 tons in 2023,
remained stable at 4,968.0 tons in 2024. Our total water consumption amounted to 3,222.0 tons in
the nine months ended September 30, 2025.
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Moving forward, we aim to further optimize energy use, reduce GHG emissions and improve
water efficiency. We aim to lower our GHG emissions intensity by 12% by 2028 compared to the
2024, primarily through optimizing energy usage, increasing efficiency in operations and gradually
transiting towards clean electricity sources.
Also, business travel is essential to our operations and client service. We aim to reduce
emission intensity by promoting a combination of virtual and in-person travel, optimizing
itineraries, and prioritizing low-carbon transport. We will also explore carbon offsetting to enhance
travel sustainability.
Corporate Social Responsibility
Employment and Care
We recognize that talent is the cornerstone of sustainable corporate development and we are
committed to fostering an inclusive, fair, and supportive workplace. We ensure that all employees’
legal rights are protected and strive to create a positive working environment that promotes
professional growth and personal well-being.
As of September 30, 2025, we employed 968 people across our operations in Chinese
mainland, including 696 male and 272 female employees. In terms of age distribution, the
workforce was primarily composed of employees aged 31 to 40, providing a stable talent structure
to meet our business development and operational needs. Recruitment follows an equal opportunity
policy that prohibits discrimination on the grounds of gender, ethnicity, age, religion or disability,
fostering a diverse and inclusive working environment.
We enter into employment contracts with our employees in accordance with the applicable
PRC laws and regulations such as the PRC labor law and the PRC labor contract law and
formulated the employee handbook (ʈ˓̅) and other internal policies.
We attach great emphasis to talent acquisition and development. We have established a
comprehensive talent selection system that combines internal promotion and external recruitment
to attract outstanding professionals who align with our corporate values. For key positions, we
uphold the principles of openness, fairness and impartiality, ensuring a structured and transparent
hiring process. We continually invest in employee development by offering diverse training
programs, refining career advancement pathways, and providing competitive compensation and
performance-based incentives. Through these initiatives, we strive to empower our employees,
enhance job satisfaction, and foster a work environment that supports both professional and
personal growth.
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Employee Benefits and Welfare
We are committed to enhancing employees’ quality of work and life by offering
comprehensive benefits and support programs. Our goal is to foster a workplace environment that
promotes employee satisfaction, well-being and long-term engagement. We strive to offer
competitive salaries to attract and retain employees and we provide attractive benefits and care to
employees, including wedding and birth benefits, festival care, and community activities.
We will also focus on embracing diversity within our organization and equal and respectful
treatment of all of our employees in their hiring, training, wellness, and professional and personal
development. While maximizing equal career opportunities for everyone, we will also continue to
promote work-life balance and create a pleasant workplace for all of our employees.
Occupational Health and Safety
We have adopted and maintained internal policies and procedures to safeguard a healthy and
safe working environment in accordance with applicable occupational safety laws. Although we do
not engage in manufacturing activities and are not exposed to material occupational safety risks,
we have adopted a series of proactive measures to ensure employee well-being and compliance
with relevant health and safety regulations. These measures include regular assessments of
workplace health and safety risks, periodic training on emergency response and chemical safety,
and annual fire drills to strengthen awareness and preparedness. We also offer routine health
check-ups to our employees to monitor and promote physical well-being. In response to evolving
regulatory requirements, we adjust our internal human resources policies as necessary, following
consultations with legal advisors, to ensure ongoing compliance with applicable labor and safety
standards.
Development and Training
To further support professional development, staff training management is divided into
on-the-job training and onboarding training. The onboarding training for employees includes
explaining professional knowledge and company culture and values. At the beginning of the year,
our human resources department collects the training requirements of all departments and conducts
on-the-job training according to common needs or pain points. At the same time, we also provide
relevant leadership training for managers at different levels to help managers improve their team
management skills and continue to move towards better management positions.
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To further support employee development, our training system is structured around
onboarding and on-the-job training. New employees receive induction programs covering corporate
culture, values, and role-specific knowledge. At the beginning of each year, the human resources
department consolidates training needs across departments and implements targeted programs
addressing shared challenges and capability gaps.
Anti-Corruption and Anti-Bribery
We have established a comprehensive anti-corruption governance system encompassing
internal policies, employee conduct standards, control mechanisms, and training programs, to
ensure compliance with anti-bribery and anti-corruption laws in all jurisdictions of operation. Key
policies include the Anti-Fraud Management Policy, the Anti-Commercial Bribery Agreement, and
the Code of Conduct as outlined in the Employee Handbook, which clearly prohibit bribery,
kickbacks, improper gifts, money laundering, and any form of unlawful payment intended to obtain
business advantage. All employees are required to sign a Commitment to Integrity upon joining the
company and must adhere to ethical conduct standards throughout procurement, bidding, and
contract negotiation processes, with a formal declaration and mechanism for conflicts of interest.
To mitigate compliance risks, the Group has implemented a multi-layered governance structure,
under which the Finance and Internal Audit Departments conduct tiered reviews of significant
payments, reimbursements, and contracts, supported by data analytics to identify anomalies.
Regular internal audits are conducted across sales, procurement, and R&D functions to assess
contract compliance, expense legitimacy, and adherence to ethical requirements. The Group also
organizes annual anti-corruption training for all employees, with tailored sessions for key
positions. The training covers real-life case studies, interpretation of laws and regulations (such as
the Criminal Law and Anti-Unfair Competition Law ), and in-depth guidance on internal policies to
strengthen employees’ legal awareness and ethical standards.
Supply Chain Management
We have established a comprehensive ESG governance framework within its supply chain
management system to ensure that all suppliers and EMS providers meet applicable environmental
and social standards. Prior to onboarding, suppliers are required to complete self-assessments on
corporate social responsibility and environmental compliance, followed by internal risk evaluations
and on-site audits.
As part of the qualification process, suppliers must sign a series of ESG-related undertakings,
including the Integrity and Anti-bribery Agreement, Social Responsibility Notification, Restriction
of Hazardous Substances Commitment, and Registration, Evaluation, Authorisation and Restriction
of Chemicals (REACH) Declaration.
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Furthermore, we promote environmentally preferable sourcing by requiring the Restriction of
Hazardous Substances (RoHS) and Material Safety Data Sheet (MSDS) documentation during
sample approval. To the best of our knowledge, no major supplier or EMS provider was found to
have material non-compliance with our ESG requirements during the reporting period, based on
available disclosures and internal reviews.
LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, we had not been
involved in any actual or pending legal, arbitration or administrative proceedings (including any
bankruptcy or receivership proceedings) that we believe would have a material adverse effect on
our business, results of operations, financial condition or reputation and compliance. Please see
“Risk Factors — Risks Relating to Our Business and Industry — We may be involved in legal
proceedings and commercial or contractual disputes, which could materially and adversely affect
our reputation, business, financial condition and results of operations.”
During the Track Record Period and up to the Latest Practicable Date, we had not been
involved in any material non-compliance incidents that have led to fines, enforcement actions, or
other penalties that could, individually or in the aggregate, have a material adverse effect on our
business, results of operations and financial conditions.
INTERNAL CONTROL AND RISK MANAGEMENT
We have established a comprehensive risk management and internal control system to ensure
compliance, operational efficiency and financial integrity. Our risk management policies cover
various critical aspects of our operations, including financial reporting, information system and
data security, compliance, intellectual property, capital utilization, audit mechanisms and human
resources management. Our Board of Directors is responsible for overseeing risk management and
internal controls, ensuring that they are adequate, effective and aligned with our strategic goals.
Our senior management team oversees the daily implementation of these internal control
procedures, ensuring compliance across all subsidiaries and functional departments. We also
conduct periodic reviews of our policies and procedures to mitigate risks and align with regulatory
requirements and business objectives.
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Internal Control and Board Oversight
We have implemented strict segregation of duties to prevent conflicts of interest and
unauthorized transactions. We have established approval hierarchies for procurement, financial
transactions and contract execution to enhance control mechanisms. We have integrated automated
control systems with SAP and other enterprise management tools to ensure compliance and
efficiency in business operations.
We conduct periodic audits and risk evaluations and findings are reported to Board of
Directors. We continuously monitor and improve our internal control processes to enhance
corporate governance and risk mitigation.
Human Resources Risk Management
We recognize that human capital is fundamental to our success and have implemented a
structured human resource management framework to support talent acquisition, employee
development, performance evaluation, training work ethics, and compliance with labor laws.
We established an integrated HR management system to streamline recruitment, payroll, and
performance assessment, improving efficiency and accuracy in human resources management. We
have developed and implemented a structured hiring and evaluation processes to ensure talent
alignment with corporate objectives. Regular performance reviews are conducted, with
compensation tied to performance outcomes. We also provide regular employee trainings on ethics,
compliance, cybersecurity, and technical skills to enhance workforce competency. Our legal team
also closely monitor the implementation of internal risk management policies to address potential
noncompliance with our code of conduct, work ethics, or internal policies.
Compliance Risk Management
We have implemented strict internal auditing procedures to ensure that our operations comply
with relevant laws and regulations. Our legal team is responsible for monitoring changes in
regulatory frameworks and implementing necessary adjustments to our policies and procedures. We
conduct comprehensive due diligence before entering into contracts with customers, suppliers, and
third parties. Our compliance risk management framework includes regular training programs,
internal audits, and monitoring mechanisms to ensure adherence to relevant laws and corporate
policies.
We conduct regular compliance training programs to enhance employees’ awareness of
regulatory obligations and ethical standards. We have also established an internal reporting
mechanism that allows employees to report potential compliance violations anonymously. The
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compliance team evaluates reported cases and takes corrective actions as necessary to prevent
compliance breaches. There have been no material compliance issues or violations during the
Track Record Period and as of the Latest Practicable Date.
We conduct periodic audits across different departments and continuously monitor and
improve our internal control processes to enhance corporate governance and business security.
Capital Management and Investment Risk Management
We have implemented strict policies for managing corporate funds to enhance liquidity,
optimize capital allocation and mitigate financial risks. Our capital management framework is
designed to ensure efficient use of funds while maintaining financial stability.
We have established a centralized cash management system to optimize cash flow and ensure
efficient capital deployment. We have implemented strict approval processes for capital
expenditures, investments and financial transactions to strengthen financial oversight and ensure
that financial transactions comply with internal policies and regulatory requirements. We conduct
regular audits and reconciliations to safeguard corporate funds and prevent financial irregularities.
We also actively manage foreign exchange risks by employing hedging strategies to minimize
exposure to currency fluctuations.
Financial Reporting Risk Management
We maintain strict controls over financial reporting to ensure accuracy, completeness and
compliance with applicable accounting standards and regulatory requirements. To manage financial
reporting risks effectively, we have adopted comprehensive accounting policies covering financial
management, budget management and financial statement preparation. Our financial reporting
process is structured to prevent material misstatements and ensure timely disclosure. We
implement a multi-layer review system for financial statements, incorporating segregation of
duties, approval hierarchies and automated accounting systems to enhance financial data integrity.
To safeguard against fraudulent reporting, our finance department conduct regular internal
audits and independent external audits to assess financial reporting risks. Our finance department
evaluates financial controls, monitors compliance with accounting policies and ensures
transparency in financial disclosures. Additionally, we employ advanced data security measures to
protect financial data from unauthorized access and cyber threats.
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Information System and Internal Communication Risk Management
The maintenance, storage, and protection of our data and related information are vital to our
success. To safeguard against data leakage and loss, we have implemented a structured information
transfer framework to manage internal communication, data privacy, and system reliability. Our
ERP systems, email chains and periodic conferences are integrated to ensure data flow and
operational efficiency.
Our data protection policies are designed to prevent unauthorized access and ensure the
security of our sensitive information.
We enforce strict access control measures, including role-based permissions and regular
audits of system usage. To mitigate cybersecurity risks, we conduct periodic security assessments,
implement multi-factor authentication, and ensure timely updates to software and security
protocols. Data encryption and regular backup procedures are in place to prevent data breaches and
ensure business continuity in case of system failures or cyber incidents.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material data breaches, loss of information, or security threats such as
cyberattacks, viruses, or ransomware. For further details, please see “Information Security and
Data Privacy” in this section.
Intellectual Property Risk Management
As a technology-intensive company, we have been and may continue to be subject to claims
from companies holding patents or other intellectual property rights, alleging infringement of such
rights or otherwise asserting their rights and urging us to obtain licenses in the course of our
operations. Please see “Risk Factors — Risks Relating to Our Business and Industry — If third
parties claim that we have infringed upon their intellectual property rights, we may incur liabilities
and penalties and may have to redesign or suspend the sales of products or solutions involved.”
We have established a robust intellectual property management system and implemented
various internal policies to safeguard proprietary technologies, patents, and trade secrets. We have
developed and implemented structured policies for patent applications and maintenance to secure
and protect our innovations. We conduct regular intellectual property research to assess potential
risks of infringement and ensure compliance with intellectual property laws. We require employees
handling sensitive information to sign confidentiality agreements and non-compete clauses to
protect our proprietary technologies.
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We have established a dedicated legal team responsible for monitoring potential intellectual
property disputes and taking necessary legal action to enforce our rights. We continuously review
and improve our intellectual property policies to enhance the protection of our technological assets
and maintain our competitive edge.
IMPACT OF THE COVID-19 PANDEMIC
The outbreak of the COVID-19 pandemic introduced significant global challenges, impacting
economies worldwide since 2020. These challenges included travel restrictions, quarantine
measures, and shifts in working arrangements.
While these restrictions temporarily disrupted sectors of the global economy, our business
operations continued with minimal disruption. Throughout this period, we adhered to government
guidelines and regulations, such as remote working policies, and prioritized the safety and
well-being of our employees.
On the supply side, we proactively communicated with our raw material suppliers and EMS
providers, strategically procured key raw materials, to ensure the normal production of our
modules and solutions. Although some of our raw materials experienced a price increase or
temporary shortage and some of our EMS providers experienced minor delays in their production,
we did not experience any material disruptions in our supply chain.
 Although we observed relatively slight price fluctuations in certain raw materials due to
global supply chain constraints during the pandemic, with respect to our SoC chip raw
materials used in our main product models, price remained relatively stable from 2020
through the third quarter of 2021, with some models even experiencing price decreases
due to our increased procurement volumes. However, from the fourth quarter of 2021
into early 2022, global chip capacity shortages led to price increases of varying degrees
for certain chips. For example, the procurement price of a 4G baseband chip which we
used as raw material increased by approximately 10% in early 2022. Please see “—
Impact of Global Chip Supply and Raw Material Price V olatility” in this section for
details of the analysis of the global chip capacity shortages. We addressed these cost
pressures through a combination of strategies, including negotiating price adjustments
with certain customers for new orders. While this exerted a degree of cost pressure and
compressed gross margins on the affected products, it did not have a material adverse
impact on our overall profitability.
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 Although some of our EMS providers faced minor delays, ranging from several days to
approximately one week, in their production schedules, we did not experience any
material or prolonged production stoppages. Our strategic procurement and close
coordination with EMS provider partners enabled us to secure sufficient supply to
maintain our production schedules without significant interruption.
On the sales side, we actively engaged with our customers to alert them to potential logistics
changes and force majeure events. Our research and development projects, product
commercialization, product delivery and customer engagement did not experience significant
delays. During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material disruption to our regular operations due to the COVID-19 pandemic.
Despite the global pandemic challenges, our overall business performance remained resilient
and continued to grow throughout the period. From 2020 to 2022, our revenue, gross profit and net
profit all demonstrated consistent growth trend.
In light of the above, our Directors are of the view that the COVID-19 pandemic did not have
any material adverse impact on our business operations and financial condition.
LICENSES, APPROV ALS AND PERMITS
The following table sets out details of the material licenses held by us for our operations as
of the Latest Practicable Date:
License/Permit Holder Grant Date Expiry Date
Certificate of Registration of Customs
Declaration Unit of the People’s
Republic of China ( ʕശɛ͏΍ձ਷
ࣣ) .......
Our Company February 14, 2012 Long-term
Foreign Trade Business Operator Filing
Registration Form (٫
ڌ) ....................
Our Company July 6, 2020 Long-term
(1)
Entry-Exit Inspection and Quarantine
Registration Form for Enterprises
(ڌࣩ) ...
Our Company January 3, 2018 Long-term
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Note:
(1) On December 30, 2022, the SCNPC adopted the Decision on Amending the Foreign Trade Law of the PRC, which
repealed the filing requirement for foreign trade operators. Pursuant to this decision, as of December 30, 2022, all
competent commerce authorities throughout the PRC ceased accepting and processing foreign trade business
operator filing registrations. Therefore, the Foreign Trade Business Operator Filing Registration Form was no
longer required to be renewed.
As of the Latest Practicable Date, we had obtained all requisite licenses, approvals and
permits from relevant government authorities that are material to our business operations in China.
We are required to renew such certificates, permits and licenses from time-to-time and we are
continuingly overseeing the compliance with the relevant laws and regulations.
A W ARDS AND RECOGNITIONS
The following table sets forth major awards and recognitions we received as of the Latest
Practicable Date.
Award/Recognition
Award
Y ear Awarding Institution/Authority
Top 100 IoT Enterprises of 2023 2024
China IoT Industry Application Alliance
and Shenzhen IoT Industry AssociationIoT Industry Innovative Product of 2023 2024
IoT Industry Benchmark Case of 2023 2024
Top 100 IoT Enterprises in China of
2022
2023 China IoT Industry Application Alliance
and Shenzhen IoT Industry Association
Top 100 Scale Suppliers of Intelligent
Network Industry Chain, 2022−2023
2023 Gaogong Intelligent Vehicle Research
Institute
2022 Shenzhen Specialized and
Innovative Enterprises
2023 Industry and Information Technology
Bureau of Shenzhen Municipality
National Specialized and Innovative
“Little Giant” Enterprise
2023 PRC Ministry of Industry and Information
Technology
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The following discussion and analysis should be read in conjunction with our consolidated
financial statements included in the Accountants’ Report in Appendix I, together with the
accompanying notes. Our consolidated financial statements have been prepared in accordance
with IFRSs.
The following discussion and analysis contain forward-looking statements that involve
risks and uncertainties. These statements are based on assumptions and analysis that we make
in light of our experience and perception of historical trends, current conditions and expected
future developments, as well as other factors we believe are appropriate under the
circumstances. However , our actual results may differ significantly from those projected in the
forward-looking statements. Factors that might cause future results to differ significantly from
those projected in the forward-looking statements include, but are not limited to, those
discussed in “Risk Factors” and “Forward-Looking Statements” and elsewhere in this
prospectus.
OVERVIEW
We are a globally leading provider of wireless communication modules and solutions. Our
wireless communication modules and solutions consist of (i) smart modules and solutions, which
include (a) regular smart modules and solutions and (b) high-computing-power smart modules and
solutions; and (ii) data transmission modules and solutions. Our wireless communication modules
and solutions are widely applied across general IoT, ICV and wireless broadband sectors, and we
are actively expanding into emerging on-device AI applications such as robots.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our total
revenue amounted to RMB2,305.9 million, RMB2,147.3 million, RMB2,941.4 million,
RMB2,182.0 million and RMB2,821.3 million, respectively, and our net profit was RMB126.6
million, RMB62.6 million, RMB134.4 million, RMB90.5 million and RMB113.2 million,
respectively.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Industry and Downstream Demand for Wireless Communication Modules and Solutions
We are a wireless communication modules and solutions provider and our business
performance is affected by the market size and customer demand for wireless communication
modules and solutions. Driven by proliferation of AI and IoT, upgrades in connected vehicles and
consumer electronics, and expansion of data centers, the global wireless communication module
market size has grown in recent years. According to Frost & Sullivan, the global wireless
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communication module market size grew from RMB32.3 billion in 2020 to RMB43.6 billion in
2024, with a CAGR of 7.7%, and is expected to further grow from RMB48.6 billion in 2025 to
RMB72.6 billion in 2029, with a CAGR of 10.6%. The China wireless communication module
market size grew from RMB17.4 billion in 2020 to RMB24.7 billion in 2024, with a CAGR of
9.1%, and is expected to further grow from RMB28.2 billion in 2025 to RMB45.5 billion in 2029,
with a CAGR of 12.7%. The growth of China and global wireless communication module market
represents an opportunity to further develop and increase the sales of our modules and solutions.
Our revenue from sales overseas increased by 21.9% from RMB545.6 million in 2022 to
RMB665.0 million in 2023, and further increased by 20.7% to RMB802.9 million in 2024.
In addition, we operate in an industry that is susceptible to the downstream demand for
wireless communication modules. The demand for our products and solutions is largely driven by
the demand for products and systems that embed our products and solutions in a wide range of
downstream application sectors, including ICV , general IoT and wireless broadband. As a result,
our revenue is affected by the demand from downstream application sectors. For example,
according to Frost & Sullivan, the market size of ICV application sector grew from RMB2.3
billion in 2020 to RMB5.0 billion in 2024, with a CAGR of 21.3%, and is expected to further
grow from RMB6.7 billion in 2025 to RMB15.9 billion in 2029, with a CAGR of 24.0%. We
observed an increase in our revenue from the ICV application sector, which increased by 73.5%
from RMB342.2 million in 2022 to RMB593.6 million in 2023, and further increased by 105.7% to
RMB1,220.9 million in 2024. We anticipate that in the coming years, the development of
technologies in and the growth of market size of our downstream application sectors such as ICV
will provide new revenue growth opportunities.
Our future growth will depend on our ability to identify and capitalize on major market
opportunities, including the proliferation of AI and IoT, upgrades in connected vehicles and
consumer electronics, and expansion of data centers. Our financial performance relies on our
ability to innovate and develop products that align with the latest technological trends and
customer preferences. We believe that our diverse product offering and our ability to constantly
innovate and adapt to evolving technological advancements, combined with our R&D capabilities,
well-position us to capture the market opportunities in global and China’s growing wireless
communication module industry and its application sectors.
Technical Innovation and Investment in Research and Development
Our operating results depend significantly on our ability to adapt to and effectively utilize the
latest technological advancements. Staying at the forefront of innovation is critical to maintaining
our competitiveness and meeting evolving market demands. Our ability to continue our R&D
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activities, develop new technologies, design new products and enhance existing products is crucial
to our market success. Therefore, we continue to invest in technology development and innovation
to reinforce our competitive strengths against our peers.
The progress of our technology and product development depends largely on our R&D talents
and our investment towards R&D. As of September 30, 2025, our R&D and technology team
consisted of 807 members, representing 83.4% of total employees. Employee compensation for our
R&D and technology staff was 63.1%, 62.7%, 61.9%, 62.5% and 61.8% of our research and
development expenses in 2022, 2023, 2024 and the nine months ended September 30, 2024 and
2025, respectively. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025,
we recorded R&D expenses of RMB185.9 million, RMB213.9 million, RMB208.1 million,
RMB148.3 million and RMB153.1 million, representing 8.1%, 10.0%, 7.1%, 6.8% and 5.4% of our
total revenue, respectively.
Ability to Attract and Maintain Key Customers and Broaden Customer Base
At the core of our growth strategy is our commitment to maintain robust relationships with
existing large-scale global customers while continuously broadening our customer base. We have
established long-standing business relationships with numerous top-tier enterprises across various
industries. We aim to develop new relationships with leading enterprises across various industries
for our modules and solutions and enhance our recognition in our downstream application sectors.
Our business scale, results of operations and financial conditions will depend on our ability to
maintain business relationships with existing customers that make repeat and large orders and
attract new customers.
We leverage our strengths in technology, quality and service to meet varied needs for
customers across different industries. We monitor changes in market demand and leverage our
end-to-end technical capabilities to achieve technical customization in order to meet higher
requirements for the performance, stability and customization of modules and solutions. This
breadth in capabilities provides numerous opportunities for fostering customer loyalty and
increasing revenue. Our strategic partnerships with major customers further establish ourselves as
a trusted wireless communication modules and solutions provider in the market, while our
reputation for reliability and innovation attracts new customers across regions and verticals. We
believe that this approach will continue to enable us to capture market share in the rapidly
expanding market and enhance our competitive position globally.
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Fluctuation in Prices of Raw Materials and Supply Chain Management
The prices of raw materials and the efficiency of supply chain management directly affect our
cost of sales and gross profit and have historically experienced fluctuations. In 2022, 2023, 2024
and the nine months ended September 30, 2024 and 2025, raw materials costs accounted for
91.3%, 92.3%, 92.8%, 93.1% and 92.6% of our cost of sales, respectively. As most of our modules
consist of baseband chip, SoC and memory chip and the cost of memory chip represent a majority
of the average raw material cost in a module, changes in the availability and prices of raw
materials, particularly memory chip, could have a significant impact on our results of operations.
The table below sets forth a sensitivity analysis of changes in our profit before tax in
response to fluctuations in cost of raw materials during the periods indicated.
Change in profit before tax
2022 2023 2024
Nine months
ended
September 30,
2025
RMB’000 RMB’000 RMB’000 RMB’000
Change in cost of raw materials (1)
+/-5% ......................... -/+86,717 -/+80,806 -/+114,003 -/+114,084
+/-10% ........................ -/+173,434 -/+161,612 -/+228,007 -/+228,168
Note:
(1) The sensitivity analysis was based on the assumption that, save for the hypothetical fluctuations in cost of raw
materials, all other factors were assumed to be unchanged. This sensitivity analysis was intended for reference only,
and actual results may differ from the amounts indicated.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, purchase from our five
largest suppliers, including baseband chip, SoC and memory chip suppliers, accounted for 57.8%,
53.3%, 63.8% and 56.7% of our total procurement cost, respectively. Please see “Risk Factors —
Risks Relating to Our Business and Industry — We may be exposed to risks relating to
fluctuations of raw material costs” for more information.
We have established long-standing and stable business relationships with major domestic and
international suppliers of memory chip to secure a reliable and quality supply of key raw materials
for production. In addition, we have been enhancing our in-house capabilities in areas, particularly
in high-end products, to reduce our reliance on external parties. Going forward, we intend to
further enhance the resilience of both our international and domestic supply chains by
strengthening our cooperation with both domestic and international top-tier suppliers.
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Scale of Our Product Offerings and Diversification of Our Product Mix
We offer a comprehensive range of modules and solutions, including regular smart modules
and solutions, high-computing-power smart modules and solutions and data transmission modules
and solutions catering to the needs of both enterprises and end customers. The scale of our
business and the growth of our revenue are largely driven by the expansion, breadth and
diversification of our product offerings. Within each product line, we strive to continuously expand
and upgrade our offerings to provide comprehensive and high-quality solutions to our customers.
Additionally, our cost of sales and pricing strategy vary across modules and solutions, resulting in
differences in our gross profit margin by module and solution type. By leveraging our diversified
product offerings and our vertically integrated business model, we are able to offer customers a
variety of products, which will create potential business growth opportunities. We anticipate that
our results of operations and profitability will continue to be influenced by the growth and mix of
our product offerings.
BASIS OF PRESENTATION
The historical financial information has been prepared in accordance with International
Accounting Standards and International Financial Reporting Standards (“ IFRSs ”), together the
IFRS Accounting Standards, which comprise all standards and interpretations approved by the
International Accounting Standards Board. All IFRSs effective for the accounting period
commencing from January 1, 2024, together with the relevant transitional provisions, have been
early adopted by our Group in the preparation of the historical financial information throughout
the Track Record Period. The historical financial information has been prepared under the
historical cost convention, except for certain financial instruments which have been measured at
fair value.
The preparation of the historical financial information in conformity with IFRSs requires the
use of certain critical accounting estimates. It also requires the management to make judgements,
estimates and assumptions in the process of applying our Group’s accounting policies. Judgements
made by the management in the application of IFRSs that have significant effect on the historical
financial information and major sources of estimation uncertainty are discussed in Note 3 to the
Accountants’ Report included in Appendix I to this prospectus.
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MATERIAL ACCOUNTING POLICIES AND ESTIMATES
We have identified certain accounting policies that are material to the preparation of our
consolidated financial statements. Some of our accounting policies require us to apply estimates
and assumptions as well as complex judgments related to accounting items. The estimates and
assumptions we use and the judgments we make in applying our accounting policies have a
significant impact on our financial position and operational results. Our management evaluates
such estimates, assumptions and judgments based on past experience and other factors, including
industry practices and expectations of future events that are deemed to be reasonable under the
circumstances. There has not been any material deviation from our management’s estimates or
assumptions and actual results, and we have not made any material changes to these estimates or
assumptions during the Track Record Period. We do not expect any material changes in these
estimates and assumptions in the foreseeable future. Details of our material accounting policies,
estimates, assumptions and judgments, which are important for understanding our financial
condition and results of operations, are set forth in Notes 2 and 3 to the Accountants’ Report in
Appendix I to this prospectus.
PRINCIPAL COMPONENTS OF CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Revenue
During the Track Record Period, we generated revenue primarily from the sale of wireless
communication modules and solutions, including (i) smart modules and solutions, which include
(a) regular smart modules and solutions and (b) high-computing-power smart modules and
solutions; and (ii) data transmission modules and solutions.
Cost of sales
Our cost of sales consists of (i) raw material costs; (ii) outsourced production costs; (iii)
direct labor costs; and (iv) others.
Gross Profit and Gross Profit Margin
Our gross profit represents our revenue less our cost of sales, and our gross profit margin
represents our gross profit divided by our revenue, expressed as a percentage.
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Other Income and Gains
Our other income primarily consists of (i) interest income; and (ii) government grants. Our
other gains primarily consist of (i) gain on early termination of a lease; (ii) gain on sublease of
right-of-use assets; (iii) gains on equity investments at fair value through profit or loss
(“FVTPL ”); (iv) net foreign exchange gains; and (v) gain on deemed disposal of a subsidiary,
which is an entity established by three entities, including us, an entity controlled by Mr. Wang and
a third-party entity. The entity’s principal business was promoting the sales of mobile broadband
and FWA products in China. Under such entity, we were primarily responsible for providing
technology and products, and the third-party partner was primarily responsible for branding, sales
channels building and sales. The deemed disposal occurred in 2024 due to the increase in
shareholding from 34.5% to 51.8% by the third-party partner, as a result of which our shareholding
of the subsidiary was reduced from 51% to 37.5% and thus we no longer held control over the
subsidiary after both parties’ negotiation and mutual agreement. As a result, this was considered as
a deemed disposal.
Selling and Marketing Expenses
Our selling and marketing expenses primarily consist of (i) employee compensation; (ii)
consultation expenses; (iii) office expenses; (iv) market expansion expenses; and (v) travel
expenses.
Administrative Expenses
Our administrative expenses primarily consist of (i) employee compensation; (ii) taxes and
surcharges; (iii) share-based payments; (iv) travel expenses; (v) entertainment expenses; (vi)
professional service expenses; and (vii) depreciation and amortization.
Research and Development Expenses
Our research and development expenses primarily consist of (i) employee compensation; (ii)
depreciation and amortization; (iii) material fees; (iv) technical service fees; (v) testing and
verification fees; and (vi) share-based payments.
(Provision for)/Reversal of Impairment Losses on Financial Assets
Our (provision for)/reversal of impairment losses on financial assets represent impairment
losses and gains on (i) trade and bills receivables; and (ii) other receivables.
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Other Expenses
Our other expenses primarily consist of net foreign exchange loss.
Finance Costs
Our finance costs consist of interest on (i) bank loans; and (ii) lease liabilities.
Share of Profits and Losses of Joint Ventures
Our share of profits and losses of joint ventures consist of profits and losses from our
investment in joint ventures including MeiLink Co., Ltd. (ٟMeiLink) and Guangzhou
Liandong Gezhi Technology Co., Ltd. (ʮ̡ ).
Share of Profits and Losses of Associates
Our share of profits and losses of associates consist of profits and losses from our investment
in ShuoGe Intelligent Technology Co., Ltd. (ʮ̡ ) and Shenzhen Pinsu Zhilian
Information Technology Co., Ltd. (ʮ̡ ).
Income Tax Expense/Benefit
We are subject to income tax on an entity basis on profits arising in or derived from the
jurisdictions in which we operate or are domiciled.
For details on applicable taxes and tax rates, please see Note 10 to the Accountants’ Report in
Appendix I to this prospectus.
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RESULTS OF OPERATIONS
The following table sets forth a summary of our consolidated statements of profit or loss and
other comprehensive income for the year or period indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Revenue ............. 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Cost of sales ............ (1,900,557) (82.4) (1,751,198) (81.6) (2,456,712) (83.5) (1,837,399) (84.2) (2,464,709) (87.4)
Gross profit ........... 405,375 17.6 396,138 18.4 484,662 16.5 344,629 15.8 356,579 12.6
Other income and gains ...... 69,733 3.0 47,138 2.2 20,015 0.7 11,929 0.5 27,948 1.0
Selling and marketing expenses .. (46,359) (2.0) (63,800) (3.0) (59,190) (2.0) (42,955) (2.0) (46,171) (1.6)
Administrative expenses ...... (59,167) (2.6) (66,752) (3.1) (70,676) (2.4) (49,784) (2.3) (54,353) (1.9)
Research and development
expenses ............. (185,909) (8.1) (213,877) (10.0) (208,136) (7.1) (148,287) (6.8) (153,125) (5.4)
(Provision for)/reversal of
impairment losses on financial
assets .............. (7,318) (0.3) (14,231) (0.7) 6,556 0.2 11,200 0.5 6,296 0.2
Other expenses .......... (6,987) (0.3) (6,764) (0.3) (29,947) (1.0) (18,198) (0.8) (1,191) (0.0)
Finance costs ........... (13,886) (0.6) (8,644) (0.4) (6,297) (0.2) (5,051) (0.2) (7,348) (0.3)
Share of profits and losses of
joint ventures .......... (618) (0.0) (511) (0.0) (860) (0.0) (580) (0.0) (568) (0.0)
Share of profits and losses of
associates ............ (5,279) (0.2) (5,570) (0.3) (11,986) (0.4) (8,364) (0.4) (5,927) (0.2)
Profit before tax ......... 149,585 6.5 63,127 2.9 124,141 4.2 94,539 4.3 122,140 4.3
Income tax (expense)/benefit ... (22,970) (1.0) (518) (0.0) 10,234 0.3 (4,041) (0.2) (8,970) (0.3)
Profit for the year/period .... 126,615 5.5 62,609 2.9 134,375 4.6 90,498 4.1 113,170 4.0
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Non-IFRS Measure
We also use adjusted net profit (non-IFRS measure) in evaluating our operating results, which
is not required by or presented in accordance with IFRS as an additional financial measure to
supplement our consolidated financial statements, which are presented in accordance with IFRS.
We define adjusted net profits (non-IFRS measure) as profit for the year adjusted for (i)
share-based payment expenses, which are non-cash in nature; and (ii) listing expenses, which
relate to the Global Offering. We believe that the non-IFRS measure provides useful information to
investors and others in understanding and evaluating our consolidated results of operations in the
same manner as they help our management. However, our presentation of adjusted net profit
(non-IFRS measure) may not be comparable to similarly titled measures presented by other
companies. The use of such non-IFRS measure has limitations as an analytical tool, and you
should not consider it in isolation from, or as a substitute for an analysis of, our results of
operations or financial condition as reported under IFRS.
The following table reconciles adjusted net profit (non-IFRS measure) to our profit for the
year or period, presented in accordance with IFRS, for the periods indicated.
For the year ended December 31,
For the nine months
ended September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit for the year/period ........ 126,615 62,609 134,375 90,498 113,170
Add:
Share-based payment expenses ..... 8,455 2,777 11,118 5,537 16,535
Listing expenses ................ ———— 7 6 7
Adjusted net profit (non-IFRS
measure) ................... 135,070 65,386 145,493 96,035 130,472
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Revenue
Revenue by Module and Solution
The following table sets forth a breakdown of our revenue by module and solution type in
absolute amounts and as percentages of the total revenue, for the periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Modules and solutions ........ 2,227,999 96.6 2,048,987 95.4 2,808,563 95.5 2,085,672 95.6 2,738,538 97.1
(i) Smart modules and solutions ... 957,351 41.5 1,218,424 56.7 1,850,696 62.9 1,394,068 63.9 1,865,127 66.1
(a) Regular smart modules and
solutions ........... 922,296 40.0 898,167 41.8 832,578 28.3 751,591 34.5 899,984 31.9
(b) High-computing-power smart
modules and solutions ... 35,055 1.5 320,257 14.9 1,018,118 34.6 642,477 29.4 965,143 34.2
(ii) Data transmission modules and
solutions ............. 1,270,648 55.1 830,563 38.7 957,867 32.6 691,604 31.7 873,411 31.0
Others (1) ................ 77,933 3.4 98,349 4.6 132,811 4.5 96,356 4.4 82,750 2.9
Total .................. 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Note:
(1) Primarily including sales of electronic components.
The following table sets forth the sales volume of our smart and data transmission modules
and solutions for the periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
(i) Smart modules and solutions ....... 2,889 2,766 3,520 2,441 3,035
(a) Regular smart modules and solutions . 2,860 2,492 2,520 1,868 2,265
(b) High-computing-power smart modules
and solutions ............... 29 274 1,001 573 770
(ii) Data transmission modules and
solutions .................... 8,986 9,104 8,648 6,522 7,185
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The following table sets forth the average selling price of our smart and data transmission
modules and solutions for the periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB RMB RMB RMB RMB
(i) Smart modules and solutions ...... 331.4 440.6 525.7 571.2 614.5
(a) Regular smart modules and
solutions .................. 322.5 360.4 330.4 402.5 397.4
(b) High-computing-power smart
modules and solutions ........ 1,200.8 1,169.8 1,017.5 1,121.2 1,252.9
(ii) Data transmission modules and
solutions .................... 141.4 91.2 110.8 106.0 121.6
The following table sets forth the sales volume of our smart and data transmission modules
and solutions by application sectors for the periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
’000 ’000 ’000 ’000 ’000
General IoT ...................... 8,489 9,143 7,709 5,542 6,399
ICV ............................ 684 1,092 2,420 1,946 1,951
Wireless Broadband ................. 2,702 1,634 2,039 1,475 1,871
The following table sets forth the average selling price of our smart and data transmission
modules and solutions by application sectors for the periods indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB RMB RMB RMB RMB
General IoT ...................... 118.4 106.2 136.3 166.9 180.7
ICV ............................ 500.4 543.5 504.5 405.2 505.9
Wireless Broadband ................. 326.1 296.5 263.4 252.7 318.3
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Please see “Results of Operations — Revenue — Revenue by Module and Solution —
Comparison between 2024 and 2023” and “Results of Operations — Revenue — Revenue by
Module and Solution — Comparison between 2023 and 2022” for details on fluctuations in
average selling price of data transmission modules and solutions.
During the Track Record Period, our revenue was primarily derived from sales of: (i) smart
modules and solutions, including (a) regular smart modules and solutions and (b)
high-computing-power smart modules and solutions; and (ii) data transmission modules and
solutions.
Comparison between the nine months ended September 30, 2025 and the nine months
ended September 30, 2024: Our revenue increased by 29.3% from RMB2,182.0 million in the nine
months ended September 30, 2024 to RMB2,821.3 million in the nine months ended September 30,
2025. Specifically:
 Smart modules and solutions: Revenue generated from sales of our smart modules and
solutions increased by 33.8% from RMB1,394.1 million in the nine months ended
September 30, 2024 to RMB1,865.1 million in the nine months ended September 30,
2025. Specifically:
(i) Regular smart modules and solutions: Revenue generated from sales of our regular
smart modules and solutions increased by 50.2% from RMB642.5 million in the
nine months ended September 30, 2024 to RMB965.1 million in the nine months
ended September 30, 2025, primarily attributable to an increase in the sales volume
of our regular smart modules; and
(ii) High-computing-power smart modules and solutions: Revenue generated from sales
of our high-computing-power smart modules and solutions increased by 19.7%
from RMB751.6 million in the nine months ended September 30, 2024 to
RMB900.0 million in the nine months ended September 30, 2025, primarily
attributable to an increase in downstream demand in the ICV application sector,
especially in the intelligent cockpit application scenario.
 Data transmission modules and solutions: Revenue generated from sales of our data
transmission modules and solutions increased by 26.3% from RMB691.6 million in the
nine months ended September 30, 2024 to RMB873.4 million in the nine months ended
September 30, 2025, primarily attributable to a 14.7% increase in the average selling
price from RMB106.0 per unit in the nine months ended September 30, 2024 to
RMB121.6 per unit in the nine months ended September 30, 2025. The increase in the
average selling price of data transmission module was primarily attributable to an
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--- page 314 ---
increase in the sales of our 5G data transmission modules and solutions as a result of
our expanded customer base. These 5G data transmission modules and solutions
generally had a higher selling price because they had more advanced functions to enable
5G connection, and, as a result, they were more expensive than other models of data
transmission modules.
 Others: Revenue generated from sales of other products decreased by 14.1% from
RMB96.4 million in the nine months ended September 30, 2024 to RMB82.8 million in
the nine months ended September 30, 2025, primarily due to a decrease in the sales of
electronic components.
Comparison between 2024 and 2023 : Our revenue increased by 37.0% from RMB2,147.3
million in 2023 to RMB2,941.4 million in 2024. Specifically:
 Smart modules and solutions : Revenue generated from sales of our smart modules and
solutions increased by 51.9% from RMB1,218.4 million in 2023 to RMB1,850.7 million
in 2024. Specifically:
(i) Regular smart modules and solutions: Revenue generated from sales of our regular
smart modules and solutions remained relatively stable at RMB898.2 million in
2023 and RMB832.6 million in 2024; and
(ii) High-computing-power smart modules and solutions: Revenue generated from sales
of our high-computing-power smart modules and solutions increased by 217.9%
from RMB320.3 million in 2023 to RMB1,018.1 million in 2024, primarily
attributable to an increase in downstream demand in the ICV application sector,
especially in the intelligent cockpit application scenario.
 Data transmission modules and solutions : Revenue generated from sales of our data
transmission modules and solutions increased by 15.3% from RMB830.6 million in 2023
to RMB957.9 million in 2024, primarily attributable to a 21.5% increase in the average
selling price of our data transmission modules from RMB91.2 per unit in 2023 to
RMB110.8 per unit in 2024. The increase in the average selling price of our data
transmission modules was primarily attributable to (i) an increase in the sales proportion
of 4G data transmission modules with higher selling price sold to certain customers; and
(ii) an increase in the sales volume of our 5G data transmission modules and solutions
as a result of our expanded customer base, thus contributing to the increase in revenue
generated from sales of 5G data transmission modules. These 5G data transmission
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--- page 315 ---
modules and solutions generally had a higher selling price because they had more
advanced functions to enable 5G connection, and, as a result, they were more expensive
than other models of data transmission modules.
 Others : Revenue generated from sales of other products increased by 35.1% from
RMB98.3 million in 2023 to RMB132.8 million in 2024, primarily attributable to an
increase in the sales of electronic components.
Comparison between 2023 and 2022 : Our revenue decreased by 6.9% from RMB2,305.9
million in 2022 to RMB2,147.3 million in 2023. Specifically:
 Smart modules and solutions : Revenue generated from sales of our smart modules and
solutions increased by 27.3% from RMB957.4 million in 2022 to RMB1,218.4 million
in 2023. Specifically:
(i) Regular smart modules and solutions: Revenue generated from sales of our regular
smart modules and solutions remained relatively stable at RMB922.3 million in
2022 and RMB898.2 million in 2023; and
(ii) High-computing-power smart modules and solutions: Revenue generated from sales
of our high-computing-power smart modules and solutions increased by 813.6%
from RMB35.1 million in 2022 to RMB320.3 million in 2023, primarily
attributable to an increase in downstream demand in the ICV application sector,
especially in the intelligent cockpit application scenario.
 Data transmission modules and solutions : Revenue generated from sales of our data
transmission modules and solutions decreased by 34.6% from RMB1,270.6 million in
2022 to RMB830.6 million in 2023, primarily due to a 35.5% decrease in the average
selling price of our data transmission modules and solutions from RMB141.4 per unit to
RMB91.2 per unit, despite a 1.3% increase in sales volume of our data transmission
modules and solutions from 2022 to 2023. The decrease in the average selling price of
our data transmission modules was primarily due to a decrease in the sales proportion of
our data transmission modules and solutions used in wireless broadband products of
overseas carriers, which generally had a higher selling price due to (i) relatively less
intense competition; and (ii) greater customer acceptance for products with high R&D
inputs and customized service in overseas markets. Such decrease was primarily because
we fulfilled a majority of the orders for these data transmission modules and solutions
in 2022. As a result of the above, the overall selling price decreased from 2022 to 2023.
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--- page 316 ---
 Others : Revenue generated from sales of other products increased by 26.2% from
RMB77.9 million in 2022 to RMB98.3 million in 2023, primarily attributable to an
increase in the sales of electronic components.
Revenue by Application Sectors
The following table sets forth a breakdown of our revenue in terms of application sectors
during the Track Record Period.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
General IoT ............... 1,004,868 43.6 970,963 45.2 1,050,531 35.7 924,712 42.4 1,156,204 41.0
ICV ................... 342,173 14.8 593,629 27.6 1,220,869 41.5 788,318 36.1 986,903 35.0
Wireless broadband .......... 880,957 38.2 484,395 22.6 537,164 18.3 372,642 17.1 595,431 21.1
Others (1) ................ 77,933 3.4 98,349 4.6 132,811 4.5 96,356 4.4 82,750 2.9
Total .................. 2,305,932 100.0 2,147,336 100.0 2,941,374 100.0 2,182,028 100.0 2,821,288 100.0
Note:
(1) Primarily including sales of electronic components.
 General IoT : Our revenue from sales of our products and solutions used in general IoT
remained relatively stable at RMB1,004.9 million in 2022 and RMB971.0 million in
2023. Our revenue from sales of these products and solutions increased by 8.2% from
RMB971.0 million in 2023 to RMB1,050.5 million in 2024, primarily attributable to an
increase in demands from our overseas customers for smart modules and solutions,
which was in line with industry trend, according to Frost & Sullivan.
Our revenue generated from sales of our products and solutions used in general IoT
increased by 25.0% from RMB924.7 million for the nine months ended September 30,
2024 to RMB1,156.2 million for the nine months ended September 30, 2025, primarily
attributable to an increased demand from domestic customers.
 ICV: Our revenue from sales of our products and solutions used in ICV increased by
73.5% from RMB342.2 million in 2022 to RMB593.6 million in 2023, and further
increased by 105.7% to RMB1,220.9 million in 2024, primarily attributable to an
increase in the sales volume of our smart modules and solutions used in ICV as a result
of increase in demand for these modules and solutions from downstream customers. Our
revenue generated from sales of our products and solutions used in ICV increased by
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--- page 317 ---
25.2% from RMB788.3 million for the nine months ended September 30, 2024 to
RMB986.9 million for the nine months ended September 30, 2025, primarily due to an
increase in sales of our 5G high-computing-power smart modules for intelligent cockpit
applications to customers.
 Wireless Broadband : Our revenue from sales of our products and solutions used in
wireless broadband decreased by 45.0% from RMB881.0 million in 2022 to RMB484.4
million in 2023, primarily because of a decrease in the sales proportion of our data
transmission modules and solutions used in wireless broadband products of overseas
carriers. Such decrease was primarily because we fulfilled a majority of these data
transmission modules and solutions in 2022, which resulted in lower volume of orders
fulfilled in 2023. Our revenue for the same products and solutions increased by 10.9%
from RMB484.4 million in 2023 to RMB537.2 million in 2024, primarily due to an
increase in the demand for data transmission modules and solutions applied in wireless
broadband as we expanded our customer base. Our revenue generated from sales of our
products and solutions used in wireless broadband increased by 59.8% from RMB372.6
million for the nine months ended September 30, 2024 to RMB595.4 million for the
nine months ended September 30, 2025, primarily attributable to our market expansion
in Japan.
Cost of Sales
The following table sets forth a breakdown of the components of our cost of sales, in
absolute amounts and as percentages of our total cost of sales, for the periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Raw material costs ........... 1,734,338 91.3 1,616,120 92.3 2,280,067 92.8 1,710,186 93.1 2,281,677 92.6
Outsourced production costs ...... 111,389 5.9 98,112 5.6 137,165 5.6 97,431 5.3 117,202 4.8
Direct labor costs ........... 25,203 1.3 15,576 0.9 10,460 0.4 8,891 0.5 30,064 1.2
Others ................. 29,626 1.5 21,391 1.2 29,019 1.2 20,891 1.1 35,766 1.4
Total .................. 1,900,557 100.0 1,751,198 100.0 2,456,712 100.0 1,837,399 100.0 2,464,709 100.0
Our cost of sales decreased by 7.9% from RMB1,900.6 million in 2022 to RMB1,751.2
million in 2023, and increased by 40.3% from RMB1,751.2 million in 2023 to RMB2,456.7
million in 2024, which was generally in line with our sales and revenue trend. Our cost of sales
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--- page 318 ---
increased by 34.1% from RMB1,837.4 million for the nine months ended September 30, 2024 to
RMB2,464.7 million for the nine months ended September 30, 2025, which was generally in line
with our sales and revenue trend.
Gross Profit and Gross Profit Margin
As a result of the foregoing, we recorded gross profit of RMB405.4 million, RMB396.1
million, RMB484.7 million, RMB344.6 million and RMB356.6 million in 2022, 2023, 2024, the
nine months ended September 30, 2024 and 2025, respectively, representing gross profit margin of
17.6%, 18.4%, 16.5%, 15.8% and 12.6%, respectively, during the same periods.
Gross Profit and Gross Profit Margin by Module and Solution
The following table sets forth a breakdown of our gross profit and gross profit margin by
module and solution for the periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Modules and solutions ........ 394,177 17.7 393,657 19.2 469,886 16.7 333,513 16.0 346,417 12.6
(i) Smart modules and solutions ... 177,730 18.6 263,107 21.6 346,307 18.7 245,361 17.6 275,655 14.8
(a) Regular smart modules and
solutions ........... 172,647 18.7 196,456 21.9 152,312 18.3 116,462 15.5 148,176 16.5
(b) High-computing-power smart
modules and solutions ... 5,083 14.5 66,651 20.8 193,995 19.1 128,899 20.1 127,479 13.2
(ii) Data transmission modules and
solutions ............ 216,447 17.0 130,550 15.7 123,579 12.9 88,152 12.7 70,762 8.1
Others (1) ................ 11,198 14.4 2,481 2.5 14,776 11.1 11,116 11.5 10,162 12.3
Total .................. 405,375 17.6 396,137 18.4 484,662 16.5 344,629 15.8 356,579 12.6
Note:
(1) Primarily including gross profit from sales of electronic component.
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Comparison between the nine months ended September 30, 2025 and the nine months
ended September 30, 2024: Our gross profit increased by 3.5% from RMB344.6 million in the
nine months ended September 30, 2024 to RMB356.6 million in the nine months ended September
30, 2025, and our gross profit margin decreased from 15.8% to 12.6% in the same periods,
primarily due to a decrease in the gross profit margin of modules and solutions and other products.
Specifically:
 Smart modules and solutions: The gross profit margin of our smart modules and
solutions decreased from 17.6% in the nine months ended September 30, 2024 to 14.8%
in the nine months ended September 30, 2025, primarily due to a decrease in the gross
profit margin of high-computing-power smart modules and solutions. Specifically:
(i) Regular smart modules and solutions: The gross profit margin of our regular smart
modules and solutions increased from 15.5% in the nine months ended September
30, 2024 to 16.5% in the nine months ended September 30, 2025, primarily due to
a proportional increase in sales for certain projects and customers in the IoT sector,
which generally had higher gross profit margin; and
(ii) High-computing-power smart modules and solutions: The gross profit margin of
our high-computing-power smart modules and solutions decreased from 20.1% in
the nine months ended September 30, 2024 to 13.2% in the nine months ended
September 30, 2025, primarily due to an increase in the unit cost of sales of our
high-computing-power smart modules and solutions as a result of an increase in the
purchase price of raw materials. While the average selling price of
high-computing-power smart modules and solutions increased by 11.7% from
RMB1,121.2 in the nine months ended September 30, 2024 to RMB1,252.9 in the
same period in 2025, the average cost increased by 21.3% from RMB896.3 to
RMB1,087.4. The more significant increase rate of average cost outweighed the
increase in average selling price, resulting in the overall decline in the gross profit
margin.
To mitigate the impact of rising component costs, we have strengthened our supply
chain management. Our supply chain team closely monitors industry information
and market intelligence to forecast price trends, particularly for memory chips. By
proactively managing our inventory levels based on these forecasts, we have been
able to partially offset the impact of cost increases. In addition, where
commercially practicable, we seek to pass through a portion of significant and
sustained cost increases to our downstream customers through pricing adjustments
in our commercial negotiations. Please see “Business — Raw Materials and
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--- page 320 ---
Procurement — Impact of Global Chip Supply and Raw Material Price V olatility”
for details. We believe that these combined efforts help reduce the effect of price
volatility on our costs and protect our gross profit margin.
 Data transmission modules and solutions: The gross profit margin of our data
transmission modules and solutions decreased from 12.7% in the nine months ended
September 30, 2024 to 8.1% in the nine months ended September 30, 2025, primarily
due to an increase in the sales proportion of our data transmission modules and
solutions sold in overseas carriers in Japan with lower gross profit margin. During the
period, a larger proportion of our sales comprised large-volume orders fulfilled for the
Japanese market, which mainly involved 5G data transmission terminals sold to a
specific Japanese customer. For orders sold to such customer, we adopted a competitive
pricing strategy to secure market share and achieve economies of scale. These orders
inherently carry lower margins, which in turn reduced the overall gross profit margin for
this product category. Such competitive pricing strategy is a short-term measure adopted
primarily for the purpose of securing well-known customers or entering new markets,
and we do not adopt competitive pricing as a long-term strategy. After achieving our
market expansion objectives through competitive pricing, we seek to gradually restore
pricing to normal levels through various measures, including: (i) leveraging domestic
supply chain advantages and economies of scale from large-scale projects to
continuously reduce supply chain costs; and (ii) continuing to participate in tenders for
customers’ subsequent projects and enhancing the overall product mix through ongoing
product iteration, by combining projects with relatively higher margins and those with
relatively lower margins, thereby improving the overall gross margin. In addition,
undertaking projects for well-known customers enhances our brand recognition and
market presence, which in turn facilitates our access to additional market opportunities
in the relevant regions or industries.
The market for data transmission modules, particularly for mature products, is
characterized by intense competition, which exerts continuous pressure on pricing. Our
strategy of securing large-volume orders, even at lower initial margins, is crucial for
maintaining our market share, strengthening customer relationships, and achieving
economies of scale in production and procurement. While this may negatively impact
our gross profit margin in the short term, we believe it enhances our long-term
competitive position. To balance our overall profitability going forward, we will
continue to focus on (i) developing and promoting newer products with higher
value-add, such as our 5G and 5G-A modules; and (ii) expanding our base of
high-quality overseas customers in diverse end-markets, which we believe will help
stabilize and improve the gross profit margin of this segment over time.
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Comparison between 2024 and 2023 : Our gross profit increased by 22.3% from RMB396.1
million in 2023 to RMB484.7 million in 2024, and our gross profit margin decreased from 18.4%
to 16.5% in the same periods, primarily due to the decrease in the gross profit margin of our
modules and solutions from 19.2% in 2023 to 16.7% in 2024. Specifically:
 Smart modules and solutions : The gross profit margin of our smart modules and
solutions decreased from 21.6% in 2023 to 18.7% in 2024. Specifically:
(i) Regular smart modules and solutions: The gross profit margin of our regular smart
modules and solutions decreased from 21.9% in 2023 to 18.3% in 2024, primarily
due to a decrease in the sales proportion of our regular smart modules and
solutions applied in ICV . These regular smart modules and solutions generally had
higher gross profit margin. Specifically, one of our major ICV customers began to
transition the majority of its procurement from our regular smart modules to our
high-computing-power smart modules for its newer vehicle platforms in 2024. This
strategic shift by our customer led to a decrease in sales volume of our regular
smart modules supplied for its projects. Although the overall revenue generated
from sales of our regular smart modules and solutions remained relatively stable at
RMB898.2 million in 2023 and RMB832.6 million in 2024, revenue generated
from sales of regular smart modules and solutions to this particular customer
experienced significant decline. Specifically, revenue generated from sales of
regular smart modules and solutions to this particular customer decreased from
RMB241.9 million, or 26.9% of the total revenue from sales of our regular smart
modules and solutions in 2023 to RMB42.7 million, or 5.1% of the total revenue
from sales of our regular smart modules and solutions in 2024. This significant
decrease in the proportional revenue contribution lead to the overall decline of the
gross profit margin from 21.9% in 2023 to 18.3% in 2024. In contrast, the gross
profit margin of our regular smart modules sold to the non-ICV sectors, remained
relatively stable.
(ii) High-computing-power smart modules and solutions: The gross profit margin of
our high-computing-power smart modules and solutions remained relatively stable
at 20.8% in 2023 and 19.1% in 2024.
 Data transmission modules and solutions : The gross profit margin of our data
transmission modules and solutions decreased from 15.7% in 2023 to 12.9% in 2024,
primarily due to
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(i) a decrease in the gross profit margin of our 4G data transmission modules applied
in ICV as a result of a large amount of sales of a 4G data transmission module
model with relatively lower gross profit margin. The lower gross margin for 4G
data transmission modules was primarily because (a) we adopted a strategic pricing
approach to enhance our market share and customer base in the automotive sector
through competitive pricing; and (b) as a mature product with wide spread market
adoption, 4G data transmission modules generally have lower margins compared to
newer and more advanced modules; and
(ii) an increase in the sales proportion of our data transmission modules and solutions
applied in wireless broadband to some overseas customers with lower gross profit
margin as an effort to secure more overseas customers and overseas market share
using competitive pricing strategies.
Comparison between 2023 and 2022 : Our gross profit remained relatively stable at
RMB405.4 million in 2022 and RMB396.1 million in 2023, and our gross profit margin increased
from 17.6% to 18.4% in the same periods, primarily due to the increase in the gross profit margin
of our modules and solutions from 17.7% in 2022 to 19.2% in 2023. Specifically:
 Smart modules and solutions : The gross profit margin of our smart modules and
solutions increased from 18.6% in 2022 to 21.6% in 2023. Specifically:
(i) Regular smart modules and solutions: The gross profit margin of our regular smart
modules and solutions increased from 18.7% in 2022 to 21.9% in 2023, primarily
due to (i) the increase in the average selling price of our regular smart modules
and solutions applied in ICV sold through direct sales (in particular, we switched
from distributorship to direct sales for one of our major ICV end customers in
2023; compared with sales through distributorship, products sold through direct
sales generally had higher average selling price and gross profit margin because
they were typically customized and could be charged at higher prices; specifically,
revenue generated from sales of regular smart modules and solutions to this
particular customer increased from RMB92.0 million, or 10.0% of the total revenue
from sales of our regular smart modules and solutions in 2022 to RMB241.9
million, or 26.9% of the total revenue from sales of our regular smart modules and
solutions in 2023); and (ii) the reduction in raw material costs as a result of
enhanced bargaining power with our suppliers driven by the expansion of sales in
our regular smart modules and solutions applied in ICV; and
(ii) High-computing-power smart modules and solutions: The gross profit margin of
our high-computing-power smart modules and solutions increased from 14.5% in
2022 to 20.8% in 2023, primarily attributable to an increase in the sales of our
high-computing-power smart modules and solutions applied in ICV , which
generally had higher gross profit margin.
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 Data transmission modules and solutions : The gross profit margin of our data
transmission modules and solutions decreased from 17.0% in 2022 to 15.7% in 2023,
primarily because we fulfilled a majority of the orders for certain overseas customers
with higher gross profit margins in 2022.
Other Income and Gains
The following table sets forth a breakdown of our other income and gains in absolute
amounts and as percentages of our total other income and gains for the periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Other Income
Interest income ............. 1,076 1.5 4,276 9.1 2,497 12.5 1,928 16.2 2,169 7.8
Government grants (1) .......... 24,782 35.5 17,477 37.1 10,696 53.4 8,829 74.0 16,272 58.2
including:
non-recurring ............ 13,117 18.8 9,709 20.6 2,034 10.2 1,697 14.2 8,580 30.7
recurring .............. 11,665 16.7 7,768 16.5 8,662 43.2 7,132 59.8 7,692 27.5
Gains
Gain on early termination of a lease . — — — — 78 0.4 78 0.7 — —
Gain on sublease of right-of-use
assets ................. —— —— —— —— 9 8 9 3 . 5
Gains on equity investments at
FVTPL ................ 43,875 62.9 25,371 53.8 1,725 8.6 — — — —
Gain on deemed disposal of a
subsidiary .............. — — — — 4,906 24.5 — — — —
Foreign exchange gains, net ...... — — — — — — — — 8,518 30.5
Others ................. — — 14 0.0 113 0.6 1,094 9.2 — —
Total .................. 69,733 100.0 47,138 100.0 20,015 100.0 11,929 100.0 27,948 100.0
Note:
(1) Governments grants primarily include stabilization subsidies, relief and development subsidies, R&D subsidies,
employment subsidies and social insurance subsidies.
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Comparison between the nine months ended September 30, 2025 and September 30, 2024 :
Our other income and gains increased by 134.3% from RMB11.9 million for the nine months
ended September 30, 2024 to RMB27.9 million for the nine months ended September 30, 2025,
primarily attributable to (i) an increase in government grants as a result of the subsidy of RMB7.2
million received from government; and (ii) an increase in net foreign exchange gains as a result of
a notable decrease in foreign exchange losses from accounts payable.
Comparison between 2024 and 2023 : Our other income and gains decreased by 57.5% from
RMB47.1 million in 2023 to RMB20.0 million in 2024, primarily due to (i) a decrease in gains on
equity investments at FVTPL due to fluctuations in the fair value of our equity investments; and
(ii) a decrease in government grants as the non-recurring government grants we received decreased
from RMB9.7 million in 2023 to RMB2.0 million in 2024.
Comparison between 2023 and 2022 : Our other income and gains decreased by 32.4% from
RMB69.7 million in 2022 to RMB47.1 million in 2023, primarily due to (i) a decrease in gains on
equity investments at FVTPL due to fluctuations in the fair value of our equity investments; and
(ii) a decrease in government grants as the non-recurring government grants we received decreased
from RMB13.1 million in 2022 to RMB9.7 million in 2023.
Selling and Marketing Expenses
The following table sets forth a breakdown of our selling and marketing expenses in absolute
terms and as percentages of our total selling and marketing expenses for the periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee compensation ........ 29,033 62.6 29,449 46.2 28,084 47.4 20,653 48.1 20,970 45.4
Consultation expenses (1) ........ 3,604 7.8 15,268 23.9 8,846 14.9 6,619 15.4 6,604 14.3
Office expenses ............ 4,163 9.0 5,510 8.6 7,859 13.3 4,157 9.7 2,804 6.1
Market expansion expenses ...... 2,326 5.0 4,834 7.6 5,362 9.1 5,207 12.1 7,311 15.8
Travel expenses ............ 3,500 7.5 4,996 7.8 3,791 6.4 2,891 6.7 2,408 5.2
Others (2) ................ 3,733 8.1 3,743 5.9 5,248 8.9 3,428 8.0 6,074 13.2
Total .................. 46,359 100.0 63,800 100.0 59,190 100.0 42,955 100.0 46,171 100.0
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Notes:
(1) Consultation expenses mainly include commissions, monthly fixed consultancy fees, and bid winning service fees
paid to our business development consultant partners. These consultants assist us in developing new customer
relationships, facilitating business opportunities and supporting bid-winning efforts. The consultants are typically
entities with industry expertise, market networks or local knowledge relevant to our wireless communication
module business.
(2) Others include hospitality expenses, share-based payments and depreciation and amortization.
Comparison between the nine months ended September 30, 2025 and September 30, 2024 :
Our selling and marketing expenses increased by 7.5% from RMB43.0 million for the nine months
ended September 30, 2024 to RMB46.2 million for the nine months ended September 30, 2025,
primarily due to (i) an increase in market expansion expenses as a result of an increase cost of
exhibition fees in 2025 to enhance brand visibility and overseas promotion; and (ii) an increase in
share-based payments.
Comparison between 2024 and 2023 : Our selling and marketing expenses decreased by 7.2%
from RMB63.8 million in 2023 to RMB59.2 million in 2024, primarily attributable to a decrease in
consultation expenses as we actively expanded our customer base and established customer
relationship overseas, thereby reducing the service fees paid to business development consultant
partners.
Comparison between 2023 and 2022 : Our selling and marketing expenses increased by
37.6% from RMB46.4 million in 2022 to RMB63.8 million in 2023, primarily due to an increase
in consultation expenses due to an increase in the service fees we paid to business consultant
partners who are typically companies with relevant local industry expertise and established track
record and network within the relevant local markets, and with necessary technical understanding
of our product and solution offerings to effectively communicate with potential customers. During
the Track Record Period, such business consulting partners assisted us with (i) securing orders
from certain customer engaged in POS machines business; as well as (ii) increasing sales of our
products in overseas markets. Pursuant to our cooperation arrangements with these business
consulting partners, we paid service fees based on the scope and performance of their services.
According to Frost & Sullivan, engaging such business consultant partners to expand overseas
markets is in line with industry practice. As a result, we paid more service fees to the business
consultant partners.
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Administrative Expenses
The following table sets forth a breakdown of our administrative expenses in absolute
amounts and as percentages of our total administrative expenses for the periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee compensation ........ 35,101 59.3 45,994 68.9 46,663 66.0 32,727 65.7 31,478 57.9
Taxes and surcharges .......... 4,544 7.7 5,368 8.0 7,369 10.4 5,074 10.2 7,021 12.9
Share-based payments ......... 3,637 6.1 1,077 1.6 3,117 4.4 1,557 3.1 4,446 8.2
Travel expenses ............ 1,861 3.1 2,731 4.1 2,634 3.7 1,925 3.9 2,529 4.6
Entertainment expenses ........ 3,577 6.0 3,870 5.8 2,607 3.7 1,948 3.9 2,272 4.2
Professional service expenses ..... 4,073 6.9 1,795 2.7 2,342 3.3 2,179 4.4 2,270 4.2
Depreciation and amortization ..... 2,226 3.8 2,340 3.5 1,964 2.8 1,520 3.1 1,743 3.2
Others (1) ................ 4,148 7.0 3,577 5.4 3,980 5.6 2,854 5.7 2,594 4.8
Total .................. 59,167 100.0 66,752 100.0 70,676 100.0 49,784 100.0 54,353 100.0
Note:
(1) Others primarily include expenses for short-term leases and utilities, office expenses and repair fees.
Comparison between the nine months ended September 30, 2025 and September 30, 2024:
Our administrative expenses increased by 9.2% from RMB49.8 million for the nine months ended
September 30, 2024 to RMB54.4 million for the nine months ended September 30, 2025, primarily
due to (i) an increase in taxes and surcharges as a result of the increase in signed business
contracts, which led to a rise in stamp duty, as well as an increase in business taxes for our
subsidiary; and (ii) an increase in share-based payment expenses, as we implemented an equity
incentive plan in July 2024 and the related expenses are allocated on a monthly basis. As a result,
only the period from July to September was subject to such allocation during the nine months
ended September 30, 2024, whereas the period from January to September was subject to such
allocation during the nine months ended September 30, 2025.
Comparison between 2024 and 2023 : Our administrative expenses increased by 5.9% from
RMB66.8 million in 2023 to RMB70.7 million in 2024, primarily due to (i) an increase in taxes
and surcharges as the revenue of some of our subsidiaries increased; and (ii) an increase in
share-based payments in relation to our employee share incentive plans.
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Comparison between 2023 and 2022 : Our administrative expenses increased by 12.8% from
RMB59.2 million in 2022 to RMB66.8 million in 2023, primarily due to (i) an increase in
employee compensation primarily attributable to an increase in the average salaries paid to our
administrative team; and (ii) an increase in travel expenses as we increased our business
development activities.
Research and Development Expenses
The following table sets forth a breakdown of our research and development expenses in
absolute amounts and as percentages of our total research and development expenses for the
periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee compensation ........ 117,286 63.1 134,136 62.7 128,770 61.9 92,637 62.5 94,679 61.8
Depreciation and amortization ..... 18,000 9.7 27,842 13.0 28,156 13.5 21,314 14.4 18,779 12.3
Material fees .............. 20,111 10.8 20,274 9.5 18,975 9.1 10,768 7.3 12,309 8.0
Technical service fees ......... 7,235 3.9 11,565 5.4 8,979 4.3 7,093 4.8 4,513 2.9
Testing and verification fees ...... 9,103 4.9 7,039 3.3 6,627 3.2 4,446 3.0 4,700 3.1
Share-based payments ......... 3,369 1.8 1,200 0.6 6,162 3.0 3,062 2.0 9,440 6.2
Others (1) ................ 10,805 5.8 11,821 5.5 10,467 5.0 8,967 6.0 8,705 5.7
Total .................. 185,909 100.0 213,877 100.0 208,136 100.0 148,287 100.0 153,125 100.0
Note:
(1) Others primarily include expenses for short-term leases and utilities, travel expenses and office expenses.
Comparison between the nine months ended September 30, 2025 and September 30, 2024:
Our research and development expenses remained relatively stable at RMB148.3 million for the
nine months ended September 30, 2024 and RMB153.1 million for the nine months ended
September 30, 2025, primarily due to an increase in share-based payment expenses, as we
implemented an equity incentive plan in July 2024 and the related expenses are allocated on a
monthly basis. As a result, only the period from July to September was subject to such allocation
during the nine months ended September 30, 2024, whereas the period from January to September
was subject to such allocation during the nine months ended September 30, 2025.
Comparison between 2024 and 2023 : Our research and development expenses remained
relatively stable at RMB213.9 million in 2023 and RMB208.1 million in 2024.
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Comparison between 2023 and 2022 : Our research and development expenses increased by
15.0% from RMB185.9 million in 2022 to RMB213.9 million in 2023, primarily due to (i) an
increase in employee compensation due to an increase in the average salaries paid to our R&D and
technology team, primarily due to the increased R&D headcount of ZhongGe Shanghai, our
subsidiary in Shanghai, where the average salary level was relatively higher compared to other
regions in China; and (ii) an increase in depreciation and amortization as we purchased more
software and licenses, which resulted in higher amortization of intangible assets recognized under
research and development expenses.
(Provision for)/Reversal of Impairment Losses on Financial Assets
We recorded provision for impairment losses on financial assets at RMB7.3 million and
RMB14.2 million in 2022 and 2023, respectively. We recorded reversal of impairment losses on
financial assets at RMB6.6 million in 2024. We recorded reversal of impairment losses on financial
assets at RMB11.2 million and RMB6.3 million in the nine months ended September 30, 2024 and
September 30, 2025, respectively.
Comparison between the nine months ended September 30, 2025 and September 30, 2024:
Our impairment gains on financial assets decreased by 43.8% from RMB11.2 million for the nine
months ended September 30, 2024 to RMB6.3 million for the nine months ended September 30,
2025, primarily due to a decrease in our trade receivables.
Comparison between 2024 and 2023 : We recorded impairment losses on financial assets of
RMB14.2 million in 2023 and impairment gains on financial assets of RMB6.6 million in 2024,
respectively, primarily because we recorded impairment gains on trade receivables of RMB7.8
million in 2024 due to enhancement of our customers’ credit profiles.
Comparison between 2023 and 2022 : Our impairment losses on financial assets increased by
94.5% from RMB7.3 million in 2022 to RMB14.2 million in 2023, primarily due to an increase in
impairment losses on trade receivables.
Other Expenses
Comparison between the nine months ended September 30, 2025 and September 30, 2024:
Our other expenses decreased by 93.5% from RMB18.2 million for the nine months ended
September 30, 2024 to RMB1.2 million for the nine months ended September 30, 2025, primarily
because of a decrease in foreign exchange gains and losses as a result of foreign currency
settlement projects in 2024.
FINANCIAL INFORMATION
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Comparison between 2024 and 2023 : Our other expenses increased by 342.7% from RMB6.8
million in 2023 to RMB29.9 million in 2024, primarily due to an increase in net foreign exchange
losses from our overseas procurement as a result of fluctuations in foreign exchange rates.
Comparison between 2023 and 2022 : Our other expenses remained relatively stable at
RMB7.0 million in 2022 and RMB6.8 million in 2023.
Finance Costs
The following table sets forth a breakdown of our finance costs for the periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Interest on bank loans and other
borrowings ............. 12,128 87.3 6,968 80.6 5,456 86.6 4,350 86.1 6,976 94.9
Interest on lease liabilities ....... 1,758 12.7 1,676 19.4 841 13.4 701 13.9 372 5.1
Total .................. 13,886 100.0 8,644 100.0 6,297 100.0 5,051 100.0 7,348 100.0
Comparison between the nine months ended September 30, 2025 and September 30, 2024:
Our finance costs increased by 45.5% from RMB5.1 million for the nine months ended September
30, 2024 to RMB7.3 million for the nine months ended September 30, 2025, primarily due to an
increase in discount interest as a result of an increase in discounted bank notes.
Comparison between 2024 and 2023 : Our finance costs decreased by 27.2% from RMB8.6
million in 2023 to RMB6.3 million in 2024, primarily attributable to (i) a decrease in interest on
bank loans due to a decrease in the interest rates related to our loans; and (ii) a decrease in interest
on lease liabilities primarily due to a decrease in our lease liabilities as a result of lease payments.
Comparison between 2023 and 2022 : Our finance costs decreased by 37.8% from RMB13.9
million in 2022 to RMB8.6 million in 2023, primarily attributable to a decrease in interest on bank
loans due to a decrease in bank borrowings.
Share of Profits and Losses of Joint Ventures
Our share of losses of joint ventures decreased by 17.3% from RMB0.6 million in 2022 to
RMB0.5 million in 2023, and increased by 68.3% from RMB0.5 million in 2023 to RMB0.9
million in 2024, primarily due to a decrease in the value of our shares as a result of losses
FINANCIAL INFORMATION
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recorded by the joint ventures that are accounted for using the equity method. Our share of losses
of joint ventures remained relatively stable at RMB0.6 million for the nine months ended
September 30, 2024 and RMB0.6 million for the nine months ended September 30, 2025.
Share of Profits and Losses of Associates
Our share of losses of associates remained relatively stable at RMB5.3 million in 2022 and
RMB5.6 million in 2023. Our share of losses of associates increased by 115.2% from RMB5.6
million in 2023 to RMB12.0 million in 2024, primarily due to a decrease in the value of our shares
as a result of losses recorded by the associates that are accounted for using the equity method. Our
share of losses of associates decreased by 29.1% from RMB8.4 million for the nine months ended
September 30, 2024 to RMB5.9 million for the nine months ended September 30, 2025, primarily
due to a decrease in investment losses of ShuoGe Intelligent.
Income Tax Expense/(Benefit)
The following table sets forth a breakdown of our income tax expense or benefit for the
periods indicated.
For the year ended December 31, For the nine months ended September 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Current income tax ........... 6,142 26.7 12,657 2,443.4 26,678 260.7 22,895 566.6 9,155 102.1
Deferred income tax .......... 16,828 73.3 (12,139)(2,343.4) (36,912) (360.7) (18,854) (466.6) (185) (2.1)
Total .................. 22,970 100.0 518 100.0 (10,234) 100.0 4,041 100.0 8,970 100.0
Our effective tax rate during the Track Record Period, calculated as income tax expense
divided by profit before tax, was lower than the 25% statutory rate, primarily because we and
some of our subsidiaries enjoyed preferential tax treatments. Please see Note 10 to the
Accountants’ Report in Appendix I to this prospectus. As of the Latest Practicable Date, we had
fulfilled all our tax obligations and did not have any unresolved tax disputes.
Comparison between the nine months ended September 30, 2025 and September 30, 2024 :
Our income tax expense increased by 122.0% from RMB4.0 million in the nine months ended
September 30, 2024 to RMB9.0 million in the nine months ended September 30, 2025, primarily
due to an increase in profit before tax.
FINANCIAL INFORMATION
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Comparison between 2024 and 2023 : We recorded income tax expense of RMB0.5 million in
2023 and income tax benefit of RMB10.2 million in 2024, primarily due to an increase in deferred
income tax credit, as a result of credit impairment losses and deductible losses from some of our
subsidiaries.
Comparison between 2023 and 2022 : Our income tax expense decreased by 97.7% from
RMB23.0 million in 2022 to RMB0.5 million in 2023, primarily because we recorded deferred
income tax credit in 2023. We recorded deferred income tax credit in 2023 primarily because of an
increase in our credit impairment losses and an increase in deductible losses from some of our
subsidiaries.
Profit for the Y ear/Period
As a result of the foregoing, our profit for the year decreased by 50.6% from RMB126.6
million in 2022 to RMB62.6 million in 2023, and increased by 114.6% from RMB62.6 million in
2023 to RMB134.4 million in 2024. Our profit for the period increased by 25.1% from RMB90.5
million in the nine months ended September 30, 2024 to RMB113.2 million in the nine months
ended September 30, 2025.
Our net profit margin declined from 6.5% in 2022 to 2.9% in 2023, primarily due to the
decrease in profit before tax of RMB86.5 million as a result of (i) an increase in the proportion of
selling and marketing expenses of our total revenue from 2.0% to 3.0%, resulting from an increase
in consultation expenses; (ii) an increase in the proportion of research and development expenses
of our total revenue from 8.1% to 10.0%, mainly resulting from an increase in employee
compensation due to the R&D headcount growth of Zhongge Shanghai; and (iii) a decrease in the
proportion of other income and gains of our total revenue from 3.0% to 2.2%, as a result of a
decrease in gains on equity investments at FVTPL due to fluctuations in the fair value of our
equity investments.
LIQUIDITY AND CAPITAL RESOURCES
Overview
We have historically funded our cash requirements mainly from cash generated from our
business operations and our fundraising activities. After the Global Offering, we intend to finance
our future capital requirements through cash generated from our business operations, the net
proceeds from the Global Offering and other future equity or debt financings. We currently do not
anticipate any changes to the availability of financing to fund our operations in the near future.
FINANCIAL INFORMATION
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Working Capital Sufficiency
Taking into account the net proceeds from the Global Offering and the financial resources
available to us, including cash and cash equivalents and cash flows from operating activities, our
Directors are of the view that we have sufficient working capital to meet our present needs and for
the next 12 months from the date of this prospectus. Our Directors confirm that we had no
material defaults on trade and non-trade payables and borrowings, nor did we breach any
covenants during the Track Record Period and up to the date of this prospectus.
Cash Flows Analysis
The following table sets forth selected cash flow statement information for the periods
indicated.
For the year ended December 31,
For the nine months ended
September 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Net cash flows from/(used in) operating
activities ....................... 31,824 (31,313) (129,890) (41,664) 44,460
Net cash flows (used in)/from investing
activities ....................... (153,412) (98,393) 16,758 36,721 (29,233)
Net cash flows from/(used in) financing
activities ....................... 16,809 191,327 306,473 104,238 (49,481)
Net (decrease)/increase in cash and cash
equivalents ..................... (104,779) 61,621 193,341 99,295 (34,254)
Cash and cash equivalents at beginning of
the year/period ................... 173,092 72,287 138,926 138,926 341,879
Effect of foreign exchange rate changes,
net ........................... 3,974 5,018 9,612 7,390 8,229
Cash and cash equivalents at end of the
year/period ..................... 72,287 138,926 341,879 245,611 315,854
Operating Activities
Our cash flows from or used in operating activities reflect our profit before tax adjusted for:
(i) non-cash or non-operating items such as finance costs, impairment or reversal of impairment of
trade receivables and amortization of intangible assets; (ii) the effects of movement in working
capital such as inventories, trade receivables and bills payables; and (iii) other cash items such as
income tax paid.
FINANCIAL INFORMATION
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In the nine months ended September 30, 2025, we had net cash flows from operating
activities of RMB44.5 million, which primarily consisted of profit before tax of RMB122.1
million, adjusted for (i) non-cash and non-operating items, such as amortization of other intangible
assets of RMB28.4 million, equity-settled share-based payment expense of RMB16.5 million, and
write-down of inventories to net realizable value of RMB14.0 million; (ii) the effects of movement
in working capital, such as increase in prepayments, other receivables and other assets of
RMB185.4 million and increase in inventories of RMB175.5 million; and (iii) income tax paid of
RMB12.6 million.
In 2024, we had net cash flows used in operating activities of RMB129.9 million, which
primarily consisted of profit before tax of RMB124.1 million, adjusted for (i) non-cash and
non-operating items, such as amortization of other intangible assets of RMB38.3 million,
write-down of inventories to net realizable value of RMB16.3 million and depreciation of
right-of-use assets of RMB14.6 million; (ii) the effects of movement in working capital, such as
increase in trade and bills receivables of RMB358.8 million and increase in inventories of
RMB145.8 million and increase in trade and bills payables of RMB114.9 million; and (iii) income
tax paid of RMB22.7 million.
In 2023, we had net cash flows used in operating activities of RMB31.3 million, which
primarily consisted of profit before tax of RMB63.1 million, adjusted for (i) non-cash and
non-operating items, such as amortization of other intangible assets of RMB30.7 million and
depreciation of right-of-use assets of RMB16.9 million and fair value gains on equity investments
measured at FVTPL of RMB25.4 million; (ii) the effects of movement in working capital, such as
increase in trade and bills receivables of RMB259.6 million, increase in trade and bills payables of
RMB159.5 million and increase in inventories of RMB51.1 million; and (iii) income tax paid of
RMB10.4 million.
In 2022, we had net cash flows from operating activities of RMB31.8 million, which
primarily consisted of profit before tax of RMB149.6 million, adjusted for (i) non-cash and
non-operating items, such as fair value gains on equity investments at FVTPL at RMB43.9 million,
depreciation of right-of-use assets of RMB19.0 million and amortization of other intangible assets
of RMB15.7 million; (ii) the effects of movement in working capital, such as increase in
inventories of RMB100.9 million, increase in trade and bills receivables of RMB97.9 million and
increase in trade and bills payables of RMB62.6 million; and (iii) income tax paid of RMB3.3
million.
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Investing Activities
In nine months ended September 30, 2025, our net cash flows used in investing activities
were RMB29.2 million, which primarily consisted of purchases of items of property, plant and
equipment, other intangible assets, and other assets of RMB22.0 million, purchases of
shareholdings in associates of RMB14.3 million, and capitalized development costs of RMB8.4
million.
In 2024, our net cash flows from investing activities were RMB16.8 million, which consisted
primarily of investment income from equity investments at FVTPL of RMB34.0 million and
purchases of items of property, plants and equipment, other intangible assets and other assets of
RMB14.0 million.
In 2023, our net cash flows used in investing activities were RMB98.4 million, which
consisted primarily of purchases of items of property, plant and equipment, other intangible assets
and other assets of RMB80.9 million and purchases of equity investments at FVTPL of RMB10.0
million.
In 2022, our net cash flows used in investing activities were RMB153.4 million, which
consisted primarily of purchases of property, plant and equipment, other intangible assets and other
assets of RMB56.1 million, purchases of equity investments at FVTPL of RMB55.0 million and
purchase of shareholdings in an associate of RMB36.0 million.
Financing Activities
In nine months ended September 30, 2025, our net cash flows used in financing activities
were RMB49.5 million, which primarily consisted of repayment of bank borrowings of RMB865.0
million, partially offset by new bank borrowings of RMB860.0 million.
In 2024, our net cash flows from financing activities were RMB306.5 million, which
consisted primarily of new bank borrowings of RMB729.5 million, partially offset by repayment of
bank borrowings of RMB382.0 million.
In 2023, our net cash flows from financing activities were RMB191.3 million, which
consisted primarily of proceeds from issuance of ordinary shares of RMB607.3 million, partially
offset by repayment of bank borrowings of RMB439.9 million.
In 2022, our net cash flows from financing activities were RMB16.8 million, which consisted
primarily of new bank borrowings of RMB513.3 million, partially offset by repayment of bank
borrowings of RMB437.1 million.
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SELECTED BALANCE SHEET ITEMS
Current Assets/Liabilities
The following table sets out our current assets and liabilities as of the dates indicated.
As of December 31,
As of
September 30,
As of
January 31,
2022 2023 2024 2025 2026
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current assets
Inventories .................. 490,386 526,319 650,552 812,156 1,132,201
Trade and bills receivables ....... 420,301 659,426 1,016,069 761,422 697,462
Prepayments, other receivables and
other assets ................ 268,613 232,598 254,122 454,017 564,709
Debt investments at fair value
through other comprehensive
income (“ FVOCI ”) .......... 5,122 38,427 9,992 26,739 69,190
Restricted cash ............... 12,828 9,584 7,998 5,340 5
Cash and cash equivalents ........ 72,287 138,926 341,879 315,854 210,760
Total current assets ........... 1,269,537 1,605,280 2,280,612 2,375,528 2,674,327
Current liabilities
Trade and bills payables ......... 331,384 485,880 579,916 571,106 640,277
Other payables and accruals ...... 68,204 60,037 109,140 86,723 87,124
Interest-bearing bank borrowings ... 310,720 5,016 352,606 348,181 420,340
Lease liabilities ............... 16,808 16,470 8,592 6,288 6,595
Contract liabilities ............. 67,451 52,328 109,344 125,086 237,465
Tax payable ................. 2,888 4,714 8,311 5,927 2,498
Total current liabilities ......... 797,455 624,445 1,167,909 1,143,311 1,394,299
Net current assets ............. 472,082 980,835 1,112,703 1,232,217 1,280,028
Comparison between September 30, 2025 and January 31, 2026 : Our net current assets
increased by 3.9% from RMB1,232.2 million as of September 30, 2025 to RMB1,280.0 million as
of January 31, 2026, as total current assets increased by RMB298.8 million, primarily driven by (i)
an increase in inventories of RMB320.0 million; (ii) an increase in prepayments, other receivables
and other assets of RMB110.7 million; and (iii) an increase in debt investments at FVOCI of
RMB42.5 million, partially offset by (iv) a decrease in trade and bills receivables of RMB64.0
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million and (v) a decrease in cash and cash equivalents of RMB105.1 million. Total current
liabilities increased by RMB251.0 million, mainly due to increases in contract liabilities, trade and
bills payables and interest-bearing bank borrowings.
Comparison between December 31, 2024 and September 30, 2025 : Our net current assets
increased by 10.7% from RMB1,112.7 million as of December 31, 2024 to RMB1,232.2 million as
of September 30, 2025, primarily due to (i) an increase in inventories of RMB161.6 million; and
(ii) an increase in prepayments, other receivables and other assets of RMB199.9 million, partially
offset by a decrease in trade and bills receivables of RMB254.6 million.
Comparison between December 31, 2023 and December 31, 2024 : Our net current assets
increased by 13.4% from RMB980.8 million as of December 31, 2023 to RMB1,112.7 million as
of December 31, 2024, primarily due to (i) an increase in trade and bills receivables of RMB356.6
million; (ii) an increase in cash and cash equivalents of RMB203.0 million, partially offset by an
increase in interest-bearing bank borrowings of RMB347.6 million.
Comparison between December 31, 2022 and December 31, 2023 : Our net current assets
increased by 107.8% from RMB472.1 million as of December 31, 2022 to RMB980.8 million as of
December 31, 2023, primarily due to (i) an increase in trade and bills receivables of RMB239.1
million; (ii) a decrease in interest-bearing bank borrowings of RMB305.7 million, partially offset
by an increase in trade and bills payables of RMB154.5 million.
Inventories
The following table sets forth our inventories as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials ................... 366,710 387,647 387,127 599,174
Finished goods .................. 49,361 50,131 70,616 106,380
Goods in transit .................. 23,590 37,152 113,192 57,277
Work in process ................. 24,485 22,087 29,608 53,067
Contract performance cost .......... 26,240 29,312 50,009 35,718
Less: impairment allowances on
inventories ................... 16,219 26,266 33,807 39,460
Total .......................... 490,386 526,319 650,552 812,156
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Our inventories increased by 7.3% from RMB490.4 million as of December 31, 2022 to
RMB526.3 million as of December 31, 2023, primarily due to an increase in raw materials as we
increased the inventory of memory chips. Our inventories increased by 23.6% from RMB526.3
million as of December 31, 2023 to RMB650.6 million as of December 31, 2024, primarily due to
our business expansion and increase in customer orders, which resulted in inventory increase,
particularly an increase in goods in transit as a result of the shipment of data transmission modules
ordered by our customers. Our inventories increased by 24.8% from RMB650.6 million as of
December 31, 2024 to RMB812.2 million as of September 30, 2025, primarily due to an increase
in raw materials as we increased the inventory of memory chips.
We believe that by maintaining optimal inventory levels, we can meet our consumer demand
and ensure their satisfaction without compromising our liquidity. To this end, we have put in place
a set of policies and procedures to manage our inventories. For details, please see “Business —
Logistics and Inventory Management.”
The following table sets forth the aging analysis of our inventories:
For the year ended December 31,
For the nine
months ended
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Under one year .................. 440,142 439,573 581,595 739,598
One to two years ................. 46,655 69,148 41,307 54,643
Two to three years ............... 1,910 17,406 24,289 11,112
Over three years ................. 1,679 192 3,361 6,803
Total .......................... 490,386 526,319 650,552 812,156
The following table sets forth our inventory turnover days for the periods indicated.
For the year ended December 31,
For the nine
months ended
September 30,
2022 2023 2024 2025
Inventory turnover days (1) .......... 85.1 106.0 87.4 81.3
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Note:
(1) Inventory turnover days were calculated based on the average of the beginning and ending balances of inventories
of a given year or period divided by cost of sales for that corresponding year or period and multiplied by 365 days
for the year or 274 days for the period.
Our inventory turnover days increased from 85.1 days in 2022 to 106.0 days in 2023,
primarily due to an increase in the inventory of memory chips in 2023. Our inventory turnover
days decreased from 106.0 days in 2023 to 87.4 days in 2024, and further decreased to 81.3 days
in the nine months ended September 30, 2025, primarily attributable to our strengthened inventory
management.
As of January 31, 2026, RMB618.5 million, or 72.6%, of our inventories as of September 30,
2025 had been sold or utilized.
Trade and Bills Receivables
Our trade and bills receivables represent receivables from customers for sales of our
products. Trade and bills receivables were generally settled within 90 days. Please see “Business
— Our Customers” for details. The following table sets forth a breakdown of our trade and bills
receivables as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivables ................. 3,483 3,446 8,116 20,292
Less: impairment of bills receivables . (2) — (117) —
Bills receivables, net .............. 3,481 3,446 7,999 20,292
Trade receivables ................ 514,671 767,427 1,111,762 839,899
Less: impairment of trade receivables . (97,851) (111,447) (103,692) (98,769)
Trade receivables, net ............. 416,820 655,980 1,008,070 741,130
Total .......................... 420,301 659,426 1,016,069 761,422
Our trade and bills receivables increased by 56.9% from RMB420.3 million as of December
31, 2022 to RMB659.4 million as of December 31, 2023, and further increased by 54.1% to
RMB1,016.1 million as of December 31, 2024, primarily due to an increase in trade receivables as
a result of an increase in revenue generated from some of our customers to whom we generally
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granted longer credit terms. These customers were typically our major or long-term partners that
exhibited strong creditworthiness, and we believe that granting longer credit terms to them aligns
with our strategic goal for revenue and business growth.
Our trade and bills receivables decreased by 25.1% from RMB1,016.1 million as of
December 31, 2024 to RMB761.4 million as of September 30, 2025, primarily due to a decrease in
trade receivables, net of RMB266.9 million as a result of a decrease in trade receivables, net from
major customers.
The following table sets forth the aging analysis of the trade and bills receivables based on
the invoice date and net of loss allowance as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within six months ............... 370,182 599,801 964,576 671,783
Seven months to one year .......... 4,896 12,200 6,662 43,447
One year to two years ............ 943 2,482 2,465 4,976
Two years to three years .......... 1,440 742 1,375 444
Three years to four years .......... 42,840 1,361 538 538
Four years to five years ........... — 42,840 1,249 1,249
Over five years .................. — — 39,204 38,985
Total .......................... 420,301 659,426 1,016,069 761,422
The table below sets forth our cash conversion cycle during the periods indicated.
For the year ended December 31,
For the nine
months ended
September 30,
2022 2023 2024 2025
Cash conversion cycle (1) ........... 85.8 112.6 112.2 103.6
Note:
(1) The cash conversion cycle was calculated by adding inventory turnover days and trade and bills receivables
turnover days, then subtracting trade and bills payables turnover days.
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The trade and bills receivables aged over five years in 2024 were primarily incurred from the
transactions with some of our customers. With respect to three of these customers and the trade
and bills receivables over five years from which accounted for a substantial portion of the trade
and bills receivables aged over five years in 2024, we have initiated legal proceedings to recover
the overdue amounts and our claim for the principal, interest, and associated proceeding costs has
received substantial support from the court. The preservation amounts we applied for would cover
the full outstanding balance, accrued interest and other expenses, which would substantially
mitigate any material recoverability issue. On basis of the above, we do not expect there would be
any recoverability issue for such trade receivables.
The following table sets forth our trade and bills receivables turnover days during the periods
indicated.
For the year ended December 31,
For the nine
months ended
September 30,
2022 2023 2024 2025
Trade and bills receivables turnover
days(1) ....................... 58.7 91.8 104.0 86.3
Note:
(1) Trade and bills receivables turnover days were calculated based on the average of opening and closing balance of
trade and bills receivables less allowance for impairment for the relevant year or period, divided by the revenue for
the same year or period and multiplied by 365 days for the year or 274 days for the period.
Our trade receivables turnover days increased from 58.7 days in 2022 to 91.8 days in 2023,
and further increased to 104.0 days in 2024, primarily due to an increased proportion of revenue
generated from some of our customers to whom we generally granted longer credit terms. Our
trade receivables turnover days decreased from 104.0 days in 2024 to 86.3 days in the nine months
ended September 30, 2025, primarily attributable to a decrease in trade receivables from Customer
A.
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We have implemented a comprehensive credit risk management policy to monitor and manage
trade receivables effectively, which are overseen by our general manager. Detailed measures
include that (i) the finance department maintains detailed receivables ledgers, prepares monthly
aging analysis reports and categorizes overdue amounts by duration to track and address overdue
receivables promptly; (ii) the finance and business departments regularly reconcile sales, delivery
and receivables data (annual account statements are sent to customers for confirmation, with any
discrepancies promptly investigated and resolved); (iii) the sales team monitors and follows up on
payments daily (for overdue accounts, the sales department is responsible for daily follow-ups on
payments as per contractual terms and reports any irregularities to the finance department; if
standard collection efforts do not succeed, the legal department is engaged to pursue collection
through legal means); and (iv) a communication platform is established between various
departments to ensure efficient coordination, with regular updates on receivables and overdue
amounts.
The internal control consultant engaged by us has conducted review on our credit risk
management policy and did not identify any material deficiencies that would cause them to
question the adequacy or effectiveness of the policy.
Our Directors are of the view that the increase of trade and bills receivables recoverability
and turnover days has not had, and will not have, any material impact on our operations and
financial performance, on the basis that (i) the increase in trade and bills receivables during the
Track Record Period was primarily due to granting longer credit terms to major customers that
have demonstrated strong creditworthiness and maintained long-term, stable cooperation with us
and it is in line with our strategic goal for revenue and business growth; and (ii) we have
implemented internal credit risk management policies and procedures to ensure that the risks
associated with trade receivables are effectively managed.
During the Track Record Period, we did not experience any significant losses associated with
our trade receivables, and the fluctuation in our trade receivables did not have any material
adverse impact on our liquidity or cash flows.
As of January 31, 2026, RMB560.7 million, or 65.2%, of our trade receivables as of
September 30, 2025, had been settled.
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Prepayments, Other Receivables and Other Assets — Current
The following table sets forth a breakdown of our current prepayments, other receivables and
other assets as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Value-added tax recoverable ........ 21,923 58,732 75,170 114,018
Prepaid income tax ............... 1,211 1,712 1 1,052
Rebate receivable from Supplier A ... 175,239 147,068 154,232 246,710
Other assets ..................... 1 , 4 5 6———
Deferred listing expenses .......... — — — 13,046
Deferred mold cost .............. 1,202 186 — —
Prepayments .................... 52,371 15,909 16,780 64,700
Other receivables ................ 13,647 8,123 7,620 11,577
Due from related parties .......... 1,564 868 319 859
Current portion of sublease of
right-of-use assets .............. — — — 2,055
Total .......................... 268,613 232,598 254,122 454,017
Our current prepayments, other receivables and other assets decreased by 13.4% from
RMB268.6 million as of December 31, 2022 to RMB232.6 million as of December 31, 2023,
primarily due to (i) an increase in our prepayments for procurement of memory chips; and (ii) a
decrease in rebate receivable from Supplier A because we reduced our procurement from Supplier
A, which resulted in a decrease in procurement rebates we received. Our rebate rate increased from
20.6% in 2022 to 20.8% in 2023. During the Track Record Period, as part of the supplier’s pricing
strategy, it offered procurement rebates to us based on market condition and supply arrangement in
accordance with our rebate agreements. According to Frost & Sullivan, such rebate arrangement is
in line with industry practice in the wireless communication module industry.
Our current prepayments, other receivables and other assets increased by 9.3% from
RMB232.6 million as of December 31, 2023 to RMB254.1 million as of December 31, 2024,
primarily due to (i) an increase in value-added tax recoverable as a result of an increased
procurement of raw materials; and (ii) an increase in rebate receivable from Supplier A because we
increase our procurement from Supplier A, which resulted in an increase in procurement rebates
we received. Our rebate rate decreased from 20.8% in 2023 to 16.5% in 2024.
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Our current prepayments, other receivables and other assets increased by 78.7% from
RMB254.1 million as of December 31, 2024 to RMB454.0 million as of September 30, 2025,
primarily due to (i) an increase in value-added tax recoverable as we increased our inventory of
raw materials; (ii) an increase in rebate receivable from Supplier A as we increased our
procurement from Supplier A; and (iii) an increase in our prepayments for the procurement from
Supplier A.
As of January 31, 2026, the settlement of rebate receivable from Supplier A was RMB62.8
million, accounting for 25.5% of rebate receivable as of September 30, 2025.
Debt Investments at FVOCI
Our debt investments at FVOCI were RMB5.1 million, RMB38.4 million, RMB10.0 million
and RMB26.7 million as of December 31, 2022, 2023, 2024 and September 30, 2025, respectively.
Our debt investments at FVOCI are bank acceptance bills provided by our customers to settle their
payment obligations to us.
Our debt investments at FVOCI increased significantly from RMB5.1 million as of December
31, 2022 to RMB38.4 million as of December 31, 2023, then later decreased to RMB10.0 million
as of December 31, 2024, primarily because on December 31, 2023, we had a larger amount of
such bank acceptance bills that were outstanding compared to December 31, 2022 or 2024, as
applicable. The larger amount was primarily due to the timing of the endorsement and transfer of
bank acceptance bills. As of December 31, 2023, the bank acceptance bills were not endorsed by
us before year-end, resulting in a higher balance compared to December 31, 2022 and December
31, 2024. Our debt investments at FVOCI increased from RMB10.0 million as of December 31,
2024 to RMB26.7 million as of September 30, 2025 primarily due to a rise in the amount of bills
endorsed to suppliers that were accepted by non-major commercial banks.
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Trade and Bills Payables
The following table sets forth a breakdown of our trade and bills payables as of the dates
indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills payables ................... 42,207 36,631 — 17,621
Trade payables .................. 289,177 449,249 579,916 553,485
Total .......................... 331,384 485,880 579,916 571,106
Our trade and bills payables increased by 46.6% from RMB331.4 million as of December 31,
2022 to RMB485.9 million as of December 31, 2023, and further increased by 19.4% to
RMB579.9 million as of December 31, 2024, primarily because of an increase in our procurement
from our suppliers, which was in line with our business and revenue growth. Our trade and bills
payables decreased by 1.5% from RMB579.9 million as of December 31, 2024 to RMB571.1
million as of September 30, 2025, primarily because of a decrease in trade and bills payables to
major suppliers.
Our Directors are of the view that the growing balance of trade and bills payables have not
had, and will not have, any material impact on our operations and financial performance, on the
basis that (i) the increase in trade and bills payables reflects our operational growth and optimized
use of supplier credit terms to manage working capital efficiently; (ii) we maintained stable and
cooperative relationships with our major suppliers and have not experienced any material payment
delays or disputes with them; and (ii) we have sufficient working capital resources to meet our
financial obligations. As of January 31, 2026, we had RMB210.8 million in cash and cash
equivalents, RMB1,280.0 million in net current assets, and RMB1,284.5 million of unutilized
banking facilities.
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The following table sets forth the aging analysis of our trade payables as of the dates
indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within one year .................. 328,133 482,003 554,495 560,168
Over one year ................... 3,251 3,877 25,421 10,938
Total .......................... 331,384 485,880 579,916 571,106
The following table sets forth our trade and bills payables turnover days during the periods
indicated.
For the year ended December 31,
For the nine
months ended
September 30,
2022 2023 2024 2025
Trade and bills payables turnover
days(1) ....................... 58.0 85.2 79.2 64.0
Note:
(1) Trade and bills payables turnover days were calculated based on the average of opening and closing balance of
trade and bills payables for the relevant year or period, divided by the cost of sales for the same year or period and
multiplied by 365 days for the year or 274 days for the period.
Our trade and bills payables turnover days increased from 58.0 days 2022 to 85.2 days in
2023, primarily because we secured more favorable payment terms with our suppliers. Our trade
and bills payables turnover days decreased from 85.2 days in 2023 to 79.2 days in 2024, and
further decreased to 64.0 days, primarily due to our efforts in settling outstanding balance with
relevant suppliers.
As of January 31, 2026, RMB496.0 million, or 86.8%, of our trade payables as of September
30, 2025 had been subsequently settled.
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Other Payables and Accruals
The following table sets forth our other payables and accruals as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payroll payable .................. 17,363 16,721 16,193 16,232
Other tax payables ............... 2,293 2,838 3,559 3,967
Value-added tax payable ........... 28,109 31,064 27,213 21,630
Other payables .................. 5,327 6,072 22,903 8,486
Due to related parties (1) ........... ——1 1—
Accruals ....................... 507 3,342 2,230 3,231
Restricted shares repurchase
obligation .................... 14,605 — 37,031 33,177
68,204 60,037 109,140 86,723
Note:
(1) Our other payables and accruals due to related parties are payables occurred from the purchase of catering service
from a related party, which is trade in nature, and the amounts have been settled in January 2025.
Our other payables and accruals decreased by 12.0% from RMB68.2 million as of December
31, 2022 to RMB60.0 million as of December 31, 2023, primarily because the restricted shares
issued under our equity incentive plan vested during 2023, resulting in a reduction of our
repurchase obligations associated with these shares and, as a result, the payables related thereto.
Our other payables and accruals increased by 81.8% to RMB109.1 million as of December 31,
2024, primarily because of an increase in other payables as a result from share repurchase and
repayment of amounts recovered by a credit insurer on behalf of us. To mitigate credit risks
associated with overseas customers, we maintain an export credit insurance policy with the credit
insurer, which is an insurance company specializing in this area. Under the credit insurance policy,
the insurer had previously compensated us for certain overdue receivables from an overseas
customer. Subsequently, upon our successful recovery of the overdue amount directly from this
customer, we became contractually obligated to refund the prior insurance compensation to the
credit insurer, in accordance with the insurance policy. This obligation, which was non-recurring in
nature, was recorded as a payable as of December 31, 2024. Our other payables and accruals
decreased by 20.5% to RMB86.7 million as of September 30, 2025, primarily because of (i) a
decrease in value-added tax payable as a result of an increase in value-added tax related to our
increased procurement of raw materials as we increased our procurement of raw materials; and (ii)
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a decrease in other payables, reflecting the settlement of the aforementioned refund to the credit
insurer that had elevated the balance as of December 31, 2024. The balance as of September 30,
2025 consequently returned to a level more consistent with our historical operating norms.
Interest-Bearing Bank Borrowings — Current
The table below sets forth our current interest-bearing bank borrowings as of the dates
indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank loans — unsecured .......... 240,720 — 122,606 348,181
Discounted bill receivables ......... — — 230,000 —
Bank loans — secured ............ 70,000 5,016 — —
Total .......................... 310,720 5,016 352,606 348,181
Our current interest-bearing bank borrowings decreased by 98.4% from RMB310.7 million as
of December 31, 2022 to RMB5.0 million as of December 31, 2023, primarily attributable to our
repayment of some of our bank loans. Our current interest-bearing bank borrowings increased
significantly from RMB5.0 million as of December 31, 2023 to RMB352.6 million as of December
31, 2024, primarily attributable to an increase in bank loans for business expansion. Our current
interest-bearing bank borrowings remained relatively stable at RMB352.6 million as of December
31, 2024 and RMB348.2 million as of September 30, 2025.
Lease Liabilities — Current
Our current lease liabilities remained relatively stable at RMB16.8 million as of December
31, 2022 and RMB16.5 million as of December 31, 2023. Our current lease liabilities decreased by
47.8% from RMB16.5 million as of December 31, 2023 to RMB8.6 million as of December 31,
2024, primarily because of lease payments. Our current lease liabilities decreased by 26.8% from
RMB8.6 million as of December 31, 2024 to RMB6.3 million as of September 30, 2025, primarily
because of a decrease in lease payments as a result of the expiration of certain lease agreements.
FINANCIAL INFORMATION
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Contract Liabilities
Our contract liabilities decreased by 22.4% from RMB67.5 million as of December 31, 2022
to RMB52.3 million as of December 31, 2023, primarily because we fulfilled some of our orders
in 2023. Our contract liabilities increased by 109.0% from RMB52.3 million as of December 31,
2023 to RMB109.3 million as of December 31, 2024, primarily due to an increase in customer
prepayments for our research and development services that we provided under our modules and
solutions business in 2024. Our contract liabilities increased by 14.4% from RMB109.3 million as
of December 31, 2024 to RMB125.1 million as of September 30, 2025, primarily due to increase
in customer prepayments for our research and development services that we provided under our
modules and solutions business.
As of January 31, 2026, RMB76.0 million, or 60.8% of our contract liabilities as of
September 30, 2025 were subsequently recognized as revenue.
Non-Current Assets and Liabilities
The following table sets out our non-current assets and liabilities as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment ....... 25,105 21,682 17,885 16,768
Other intangible assets ............ 75,446 118,667 109,078 104,728
Right-of-use assets ............... 40,900 24,037 9,405 6,975
Investments in joint ventures ........ 2,399 1,888 1,479 2,260
Investments in associates ........... 63,663 58,168 46,181 54,583
Equity investments at FVTPL ....... 198,875 234,246 189,971 176,137
Prepayments, other receivables and
other assets ................... 9,693 21,190 16,536 23,982
Deferred tax asset ................ 41,085 59,564 88,410 89,704
Total non-current assets .......... 457,166 539,442 478,945 475,137
Non-current liabilities
Interest-bearing bank borrowings ..... 60,000 — — —
Deferred income ................. 950 3,875 3,875 3,875
Lease liabilities .................. 27,078 9,300 1,417 3,870
Deferred tax liabilities ............. 20,969 27,309 19,243 18,284
Total non-current liabilities ....... 108,997 40,484 24,535 26,029
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Property, Plant and Equipment
The following table sets forth our property, plant and equipment as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Buildings ....................... 2,944 2,741 2,538 2,385
Machinery and equipment .......... 1,795 1,332 1,239 1,189
Motor vehicles .................. 1,319 1,194 1,757 1,607
Electronic equipment and others ..... 18,407 16,002 12,087 11,469
Leasehold improvements .......... 640 413 264 118
Total .......................... 25,105 21,682 17,885 16,768
The carrying amount of our property, plant and equipment decreased by 13.6% from
RMB25.1 million as of December 31, 2022 to RMB21.7 million as of December 31, 2023,
primarily due to depreciation provided during the year.
The carrying amount of our property, plant and equipment decreased by 17.5% from
RMB21.7 million as of December 31, 2023 to RMB17.9 million as of December 31, 2024,
primarily due to depreciation provided during the year.
The carrying amount of our property, plant and equipment decreased by 6.2% from RMB17.9
million as of December 31, 2024 to RMB16.8 million as of September 30, 2025, primarily due to
depreciation provided during the period.
Other Intangible Assets
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Software ....................... 31,404 43,696 48,560 44,894
License rights ................... 44,042 74,971 60,518 59,834
Total .......................... 75,446 118,667 109,078 104,728
FINANCIAL INFORMATION
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Our other intangible assets increased by 57.4% from RMB75.4 million as of December 31,
2022 to RMB118.7 million as of December 31, 2023, primarily because we purchased additional
software and license rights, including the platform licensing fees of one of the platforms developed
by one of our major suppliers, a leading technology company, for the research and development of
our smart modules. Our other intangible assets decreased by 8.1% from RMB118.7 million as of
December 31, 2023 to RMB109.1 million as of December 31, 2024, primarily due to amortization.
Our other intangible assets decreased by 4.0% from RMB109.1 million as of December 31, 2024
to RMB104.7 million as of September 30, 2025, primarily due to amortization.
Right-of-Use Assets
As of December 31, 2022, 2023, 2024 and September 30, 2025, our right-of-use assets were
RMB40.9 million, RMB24.0 million, RMB9.4 million and RMB7.0 million, respectively.
Our right-of-use assets decreased by 41.3% from RMB40.9 million as of December 31, 2022
to RMB24.0 million as of December 31, 2023, and further decreased by 60.8% to RMB9.4 million
as of December 31, 2024, primarily due to depreciation provided during the lease term of these
right-of-use assets. Our right-of-use assets decreased by 25.8% from RMB9.4 million as of
December 31, 2024 to RMB7.0 million as of September 30, 2025, primarily due to depreciation
provided during the lease term of these right-of-use assets, as well as sublease of certain
right-of-use assets.
Equity Investments at FVTPL
Our equity investments at FVTPL arise from our investments in equity securities. As of
December 31, 2022, 2023, 2024 and September 30, 2025, our equity investments at FVTPL were
RMB198.9 million, RMB234.2 million, RMB190.0 million and RMB176.1 million, respectively.
Our equity investments at FVTPL increased by 17.8% from RMB198.9 million as of
December 31, 2022 to RMB234.2 million as of December 31, 2023, primarily due to (i) an
increase in the fair value of our equity investments; and (ii) additional equity investments we made
in 2023. Our equity investments at FVTPL decreased by 18.9% from RMB234.2 million as of
December 31, 2023 to RMB190.0 million as of December 31, 2024, primarily because we disposed
some of our equity investments in 2024. Our equity investments at FVTPL decreased by 7.3%
from RMB190.0 million as of December 31, 2024 to RMB176.1 million as of September 30, 2025,
primarily because of disposal of our equity investment.
FINANCIAL INFORMATION
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Prepayments, Other Receivables and Other Assets — Non-Current
As of December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Prepayments for property, plant and
equipment .................... 4 5 0———
Prepayments for other intangible
assets ........................ — 1,002 849 1,584
Prepayments for other non-current
assets ........................ — 2,092 2,025 2,025
Non-current portion of receivables
from sublease of right-of-use assets — — — 1,590
Development expenditure .......... 5,386 12,922 7,705 9,321
Deferred expenses ............... 899 3,354 4,598 7,770
Deferred mold cost .............. 2,958 1,820 1,359 1,692
Total .......................... 9,693 21,190 16,536 23,982
Our non-current prepayments, other receivables and other assets increased by 118.6% from
RMB9.7 million as of December 31, 2022 to RMB21.2 million as of December 31, 2023, primarily
because we made prepayments for intangible assets and other non-current assets and incurred
additional development expenditure for the research and development projects initiated in 2023.
Our non-current prepayments, other receivables and other assets decreased by 22.0% from
RMB21.2 million as of December 31, 2023 to RMB16.5 million as of December 31, 2024,
primarily due to a decrease in development expenditure as the non-recurring expenditure ended
with our research and development projects from 2023. Our non-current prepayments, other
receivables and other assets increased by 45.0% from RMB16.5 million as of December 31, 2024
to RMB24.0 million as of September 30, 2025, primarily due to (i) an increase in prepayments for
other intangible assets as a result of variations in our contract signings and fulfillment; (ii) an
increase in deferred expenses primarily due to amortization; and (iii) an increase in deferred mold
cost primarily due to amortization.
Interest-Bearing Bank Borrowings — Non-Current
Our non-current interest-bearing bank borrowings decreased from RMB60.0 million as of
December 31, 2022 to nil as of December 31, 2023, primarily because we repaid our long-term
bank borrowings. Our non-current interest-bearing bank borrowings remained at nil as of
December 31, 2024 and September 30, 2025.
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Lease Liabilities — Non-Current
As of December 31, 2022, 2023, 2024 and September 30, 2025, our non-current lease
liabilities were RMB27.1 million, RMB9.3 million, RMB1.4 million and RMB3.9 million,
respectively.
Our non-current lease liabilities decreased by 65.7% from RMB27.1 million as of December
31, 2022 to RMB9.3 million as of December 31, 2023, and further decreased by 84.9% to RMB1.4
million as of December 31, 2024, primarily because of lease payments. Our non-current lease
liabilities increased by 173.1% from RMB1.4 million as of December 31, 2024 to RMB3.9 million
as of September 30, 2025, primarily because we entered into new lease agreements.
INDEBTEDNESS
The table below sets out the details of our indebtedness as of the dates indicated:
As of December 31,
As of
September 30,
As of
January 31,
2022 2023 2024 2025 2026
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current
Interest-bearing bank borrowings .... 310,720 5,016 352,606 348,181 420,340
Lease liabilities ............... 16,808 16,470 8,592 6,288 6,595
Non-current
Interest-bearing bank borrowings .... 60,000 — — — —
Lease liabilities ............... 27,078 9,300 1,417 3,870 9,406
Total ..................... 414,606 30,786 362,615 358,339 436,341
Interest-Bearing Bank Borrowings
As of December 31, 2022, 2023, 2024, September 30, 2025 and January 31, 2026, our
interest-bearing bank borrowings, including current and non-current portion, were RMB370.7
million, RMB5.0 million, RMB352.6 million and RMB348.2 million and RMB420.3 million,
respectively. Please see “Selected Balance Sheet Items — Current Assets/Liabilities —
Interest-Bearing Bank Borrowings — Current” and “Selected Balance Sheet Items — Non-Current
Assets/Liabilities — Interest-Bearing Bank Borrowings — Non-Current” in this section and Note
27 to the Accountants’ Report in Appendix I to this prospectus for details.
FINANCIAL INFORMATION
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Our Directors confirm that there was no default in payments of our liabilities or breach of
covenants during the Track Record Period and up to the Latest Practicable Date.
As of the January 31, 2026, our unutilized banking facilities were RMB1,284.5 million.
Lease Liabilities
As of December 31, 2022, 2023 and 2024, and September 30, 2025, our lease liabilities,
including current and non-current portion, were RMB43.9 million, RMB25.8 million, RMB10.0
million and RMB10.2 million, respectively. Our lease liabilities increased by 57.5% from
RMB10.2 million as of September 30, 2025 to RMB16.0 million as of January 31, 2026. Please
see “Selected Balance Sheet Items — Current Assets/Liabilities — Lease Liabilities — Current”
and “Selected Balance Sheet Items — Non-Current Assets/Liabilities — Lease Liabilities —
Non-Current” in this section and Note 15 to the Accountants’ Report in Appendix I to this
prospectus for details.
No Other Outstanding Indebtedness
Except as disclosed above, as of January 31, 2026, we did not have any outstanding
mortgages, charges, debentures, other issued debt capital, bank overdrafts, borrowings, liabilities
under acceptance or other similar indebtedness, hire purchase commitments, guarantees or other
material contingent liabilities. After due and careful consideration, our Directors confirm that, up
to the Latest Practicable Date, there has been no material change in our indebtedness since January
31, 2026.
CONTINGENT LIABILITIES OR GUARANTEES
During the Track Record Period and up to the Latest Practicable Date, we did not have any
material contingent liabilities that would have a material impact on our financial position or results
of operations.
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CAPITAL EXPENDITURE
The following table sets forth a breakdown of our capital expenditures for the periods
indicated.
For the year ended December 31,
As of
September 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payment for purchases of items of
property, plant and equipment, other
intangible assets and other assets ... 56,126 80,883 14,049 21,966
We funded our capital expenditure requirements during the Track Record Period mainly from
cash flow generated from operating activities and financing activities. We expect to fund these
capital expenditures with a combination of cash flow generated from operating activities, equity
and debt financing and net proceeds from the Global Offering. Please see “Future Plans and Use of
Proceeds” for further details. We will continue to make capital expenditures to meet the expected
growth of our business.
CAPITAL COMMITMENTS
We did not have capital commitments as of December 31, 2022, 2023, 2024 and September
30, 2025.
KEY FINANCIAL RATIOS
The following table sets out our key financial ratios as of the dates indicated.
As of December 31,
As of
September 30,
2022 2023 2024 2025
Current ratio (1) .................. 1.59 2.57 1.95 2.08
Quick ratio (2).................... 0.98 1.73 1.40 1.37
Notes:
(1) Current ratio equals to total current assets divided by total current liabilities as of end of the respective year or
period.
(2) Quick ratio equals to current assets less inventories divided by current liabilities as of the end of the respective
year or period.
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Current Ratio
Our current ratio increased from 1.59 as of December 31, 2022 to 2.57 as of December 31,
2023, primarily due to (i) an increase in trade and bills receivables of RMB239.1 million; and (ii)
a decrease in interest-bearing bank borrowings of RMB305.7 million, partially offset by an
increase in trade and bills payables of RMB154.5 million.
Our current ratio decreased from 2.57 as of December 31, 2023 to 1.95 as of December 31,
2024, primarily due to (i) an increase in interest-bearing bank borrowings of RMB347.6 million;
and (ii) an increase in trade and bills payables of RMB94.0 million, partially offset by an increase
in trade and bills receivables of RMB356.6 million.
Our current ratio increased from 1.95 as of December 31, 2024 to 2.08 as of September 30,
2025, primarily due to (i) an increase in inventories of RMB161.6 million; and (ii) an increase in
prepayments, other receivables and other assets of RMB199.9 million, partially offset by an
increase in contract liabilities of RMB15.7 million.
Quick Ratio
Our quick ratio increased from 0.98 as of December 31, 2022 to 1.73 as of December 31,
2023, primarily due to (i) an increase in trade and bills receivables of RMB239.1 million; and (ii)
a decrease in interest-bearing bank borrowings of RMB305.7 million, partially offset by an
increase in trade and bills payables of RMB154.5 million.
Our quick ratio decreased from 1.73 as of December 31, 2023 to 1.40 as of December 31,
2024, primarily due to (i) an increase in interest-bearing bank borrowings of RMB347.6 million;
and (ii) an increase in trade and bills payables of RMB94.0 million, partially offset by an increase
in trade and bills receivables of RMB356.6 million.
Our quick ratio decreased from 1.40 as of December 31, 2024 to 1.37 as of September 30,
2025, primarily due to (i) a decrease in trade and bills receivables of RMB254.6 million; (ii) a
decrease in cash and cash equivalents of RMB26.0 million; and (iii) an increase in contract
liabilities of RMB15.7 million, partially offset by an increase in debt investments at fair value
through other comprehensive income of RMB16.7 million.
OFF-BALANCE SHEET ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
arrangements. We also have not entered into any financial guarantees or other commitments to
guarantee the payment obligations of third parties. In addition, we have not entered into any
FINANCIAL INFORMATION
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derivative contracts that are indexed to our equity interests and classified as owners’ equity.
Furthermore, we do not have any retained or contingent interest in assets transferred to an
unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do
not have any variable interest in any unconsolidated entity that provides financing, liquidity,
market risk or credit support to us or that engages in leasing, hedging or research and development
services with us.
RELATED PARTY TRANSACTIONS
Related party transactions are set out in Note 37 to the Accountants’ Report in Appendix I to
this prospectus. Our Directors confirm that these transactions were conducted in the ordinary and
usual course of business and on an arm’s length basis, and they did not distort our results of
operations or make our historical results not reflective of our future performance.
FINANCIAL RISKS DISCLOSURE
We are exposed to a variety of financial risks, including foreign currency risk, credit risk and
liquidity risk. Our overall risk management program focuses on the unpredictability of financial
markets and seeks to minimize potential adverse effects on our financial performance. Our
Directors reviewed and agreed the following risk management policies. Please see Note 40 to the
Accountants’ Report in Appendix I to this prospectus for details.
Foreign Currency Risk
Foreign currency risk arises from sales or purchases in currencies other than our functional
currencies. For a sensitivity analysis of a reasonably possible change in the foreign currency
exchange rates, with all other variables held constant, of our profit before tax for each period of
the Track Record Period, see Note 40 to the Accountants’ Report set forth in Appendix I to this
prospectus.
Credit Risk
We are exposed to credit risk in relation to our financial assets such as cash and cash
equivalents, restricted cash, prepayments, other receivables and other assets. We trade only with
recognized and creditworthy parties. It is our policy that all customers who wish to trade on credit
terms are subject to credit verification procedures. In addition, receivable balances are monitored
on an ongoing basis. For details of our credit risk, please see Note 40 to the Accountants’ Report
set out in Appendix I to this prospectus.
FINANCIAL INFORMATION
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Liquidity Risk
Our objective is to maintain a balance between continuity of funding and flexibility through
the use of interest-bearing bank borrowings and lease liabilities. We monitor our risk to a shortage
of funds using a recurring liquidity planning tool that considers the maturity of our financial
instruments and financial assets, such as trade and bills receivables and projected cash flows from
operations. For details of our liquidity risk, please see Note 40 to the Accountants’ Report set out
in Appendix I to this prospectus.
Capital Management
The primary objectives of our capital management are to safeguard our ability to continue as
a going concern and to maintain healthy capital ratios in order to support our business and
maximize shareholders’ value. We manage our capital structure and make adjustments in light of
changes in economic conditions and the risk characteristics of the underlying assets. To maintain
or adjust the capital structure, we may adjust the dividend payment to shareholders, return capital
to shareholders or issue new shares. We monitor capital using the debt-to-asset ratio, which is total
liabilities divided by total assets. For more details of our capital management, please see Note 40
to the Accountants’ Report set out in Appendix I to this prospectus.
DIVIDENDS
Dividend distribution to our shareholders is recognized as a liability in the period in which
the dividends are approved by our shareholders or Directors, as appropriate. During the Track
Record Period, we paid dividends of RMB24.8 million, RMB25.9 million, RMB25.8 million and
RMB33.9 million in 2022, 2023, 2024 and the nine months ended September 30, 2025,
respectively. As of the Latest Practicable Date, no dividends had been declared or remained unpaid
by us.
We do not have a fixed dividend distribution ratio. According to the PRC Company Law ( ʕ
) and the No. 3 Guideline for the Supervision of Listed Companies — Cash
Dividend Distribution of Listed Companies (2025 Revision) (ˏୋ 3໮ — ɪ̹ʮ
ߎ2025ࠈࡌ)), and the Articles of Association, we are required to pay cumulative
cash dividends of any three fiscal years that account for not less than 30% of our average net
profits for those three fiscal years that are available for distribution, calculated in accordance with
PRC GAAP, provided that, among others, the sustainable operation and long term development of
the Company will not be impacted and there is no plan for significant capital expenditure. Future
profit distributions may be carried out in the form of cash dividends or stock dividends or a
combination of cash dividends and stock dividends. Any proposed distribution of dividends is
subject to the discretion of our Board and the approval at our Shareholders’ meetings. Our Board
FINANCIAL INFORMATION
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may recommend a distribution of dividends in the future after taking into account our results of
operations, financial condition, operating requirements, capital requirements, shareholders’
interests and any other conditions that our Board may deem relevant.
DISTRIBUTABLE RESERVES
As of September 30, 2025, we had retained profits of RMB638.5 million. Our retained
earnings represented the distributable reserves available for distribution to our Shareholders.
LISTING EXPENSES
Our listing expenses mainly include (i) underwriting-related expenses, such as underwriting
fees and commissions; and (ii) non-underwriting-related expenses, comprising professional fees
paid to our legal advisors and Reporting Accountants for their services rendered in relation to the
Listing and the Global Offering, and other fees and expenses. Assuming full payment of the
discretionary incentive fee, the estimated total listing expenses (based on the maximum Offer Price
of HK$28.86 per Share) for the Global Offering are approximately HK$65.6 million, accounting
for approximately of 6.5% of our gross proceeds. Among such estimated total listing expenses, we
expect to pay underwriting-related expenses of HK$34.8 million, professional fees for our legal
advisors and Reporting Accountants of HK$20.0 million and other fees and expenses of HK$10.8
million. An estimated amount of HK$3.8 million for our listing expenses, accounting for
approximately 0.4% of our gross proceeds, was or is expected to be expensed through the
statement of profit or loss and other comprehensive income, and the remaining amount of HK$61.8
million is expected to be recognized directly as a deduction from equity upon the Listing. We did
not recognize any listing expenses in 2022, 2023, 2024. As of September 30, 2025, listing
expenses in an aggregate of RMB0.8 million were incurred and charged to our consolidated
statement of profit or loss, and RMB13.0 million will be deducted from equity upon the listing.
UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS
Please see “Appendix IIA — Unaudited Pro Forma Financial Information.”
NO MATERIAL ADVERSE CHANGE
Our Directors have confirmed that up to the date of this prospectus, there has been no
material adverse change in our financial or trading position or prospects since September 30, 2025,
being the end date of our latest audited financial statements, and there has been no event since
September 30, 2025 that would materially affect the information shown in the Accountants’ Report
set out in Appendix I to this prospectus.
FINANCIAL INFORMATION
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DISCLOSURE REQUIRED UNDER LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, they were not aware of any
circumstances that would give rise to a disclosure requirement under Rule 13.13 to Rule 13.19 of
the Listing Rules.
PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
On the basis set out in Appendix IIB to this Prospectus, and in the absence of unforeseen
circumstances, we estimate that our unaudited consolidated profit attributable to owners of our
Company for the year ended December 31, 2025 is as follows:
Estimated consolidated profit attributable to owners
of our Company ...........................
Not less than RMB140 million
Our Directors have prepared the estimate of the consolidated profit attributable to owners of
our Company for the year ended December 31, 2025 (the “ Profit Estimate ”) on the basis of (i) the
audited consolidated results of our Group for the nine months ended September 30, 2025; and (ii)
the unaudited consolidated results of our Group for the remaining three months ended December
31, 2025 based on the management accounts of our Group.
The Profit Estimate has been prepared on the basis of the accounting policies consistent in all
material respects with those currently adopted by our Group as summarized in the Accountants’
Report as set out in Appendix I to this Prospectus.
FINANCIAL INFORMATION
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OVERVIEW
As of the Latest Practicable Date, our Company was held as to (i) 39.13% by Mr. WANG
Ping; and (ii) 10.03% by ZhaoGe Investment, which was ultimately controlled by Mr. WANG Ping
as its general partner, representing 39.13% and 10.03% of the voting power at general meetings of
our Company, respectively. For details, please see “History and Corporate Structure — Corporate
Structure” in this prospectus.
Accordingly, immediately following the completion of the Global Offering (assuming that no
additional Shares are issued pursuant to our Equity Incentive Plans), Mr. WANG Ping, directly and
indirectly through ZhaoGe Investment, will be entitled to exercise a total of 43.36% of the voting
power at general meetings of our Company. Upon Listing, each of Mr. WANG Ping and ZhaoGe
Investment will together constitute a group of our Controlling Shareholders under the Listing
Rules.
INTEREST IN COMPETING BUSINESS
Each of our Controlling Shareholders confirms that he/it had no interest in any business apart
from the business of our Group which competes or is likely to compete, either directly or
indirectly, with the business of our Group, which would require disclosure under Rule 8.10 of the
Listing Rules as of the Latest Practicable Date.
NON-COMPETITION UNDERTAKINGS
In June 2017, for the purpose of the listing of our A Shares on the Shenzhen Stock Exchange
and in order to avoid potential competition with our Company, Mr. WANG Ping provided a
non-competition undertaking in favor of our Company, confirming that (i) he has not, directly or
indirectly, engaged in any business activities that are identical with, similar to, or compete with
the Group’s business in any respect (“ Competing Business ”); (ii) he has not held any positions or
act as a director, senior management member, or key technical personnel in enterprises, institutions
or other organizations engaging in Competing Business; (iii) he will not engage in or assist any
Competing Business; (iv) if there are any business opportunities within the scope of our
Company’s principal business in the future, he or entities controlled by him would give priority in
referring those opportunities to the Group upon the request of the Company; and (v) if he fails to
fulfill the above undertakings, he would indemnify the Group for any loss suffered as a result
thereof. The above undertakings are legally binding on each of our Controlling Shareholders and
expire on the date when he/it ceases to be a controlling shareholder, actual controller or person
acting in concert with the actual controller of our Company.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable of
carrying on our business independently of our Controlling Shareholders and their respective close
associates upon Listing.
Management Independence
Upon Listing, our Board will comprise seven Directors, including four executive Directors
and three independent non-executive Directors. Our management and operational decisions are
made collectively by our Board and senior management, most of whom have served our Group for
a significant period and have substantial and extensive relevant industry experience and expertise
as set out in “Directors and Senior Management.” Save for Mr. WANG Ping, our Controlling
Shareholder and executive Director, who serves as a general partner of ZhaoGe Investment, an
investment platform established for our equity incentive plans, none of our Directors or members
of the senior management is a controlling shareholder or holds any directorship or executive
position in our Controlling Shareholder or their close associates.
Our Directors consider that our Board and senior management will function independently of
our Controlling Shareholders for the following reasons:
(i) each Director is aware of his or her fiduciary duties as a Director which require, among
other things, that such Director acts for the best interests of our Company and our
Shareholders as a whole and avoid any conflict between his or her duties as a Director
and his or her personal interests;
(ii) our Company has established internal control mechanisms to identify connected
transactions to ensure that our Shareholders or Directors with conflicting interests in a
proposed transaction will abstain from voting on the relevant resolutions pursuant to the
relevant requirements under our Articles of Association and/or the Listing Rules;
(iii) in the event that there is a potential conflict of interest arising from any transaction
between our Company and our Directors or their respective close associates, the
interested Director(s) is required to declare the nature of such interest before voting at
the relevant Board meetings of our Company in respect of such transactions;
(iv) all of the other Directors are independent from our Controlling Shareholders, and
decisions of the Board require the approval of a majority vote from the Board; and
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(v) we have appointed three independent non-executive Directors, comprising more than
one third of the total members of our Board, who have sufficient knowledge, experience
and competence to provide a balance of the potentially interested Directors and
independent Directors with a view to safeguard the interests of our Company and the
Shareholders as a whole.
Based on the above, our Directors are of the view that our Board and senior management as a
whole are capable to perform their roles in our Company independently and manage our business
independently of our Controlling Shareholders and their respective close associates after Listing.
Operational Independence
We are not operationally dependent on our Controlling Shareholders. We have established our
own organizational structure, with each department assigned to specific areas of responsibilities
which have been in operation and are expected to continue to operate independently of our
Controlling Shareholders and their respective close associates. We have independent access to
suppliers and customers. We are also in possession of relevant assets, licenses, trademarks and
other intellectual property and research and development facilities necessary to carry on and
operate our business. We have sufficient operational capacity in terms of capital and employees to
operate independently.
Based on the above, our Directors are satisfied that we will be able to operate independently
of our Controlling Shareholders and their respective close associates after Listing.
Financial Independence
We have the ability to operate independently of our Controlling Shareholders and their
respective close associates from a financial perspective. We have an independent financial system
and make financial decisions according to our own business needs. We have our independent
financial department with a team of independent financial staff responsible for discharging the
treasury function, and an audit committee comprising solely independent non-executive Directors
to oversee our accounting and financial reporting processes. We make tax registration and pay tax
independently with our own funds. As such, our financial functions, such as cash and accounting
management, invoices and bills, operate independently of our Controlling Shareholders and their
respective close associates.
We do not rely on our Controlling Shareholders or their close associates to provide financial
assistance to our Group. We have independent access to third party financing, and our Directors
believe that, if necessary, we are capable of obtaining financing from external sources without
relying on our Controlling Shareholders or their respective close associates. As of the Latest
Practicable Date, none of our Controlling Shareholders or their respective close associates had
provided any loans, borrowings or guarantees to our Group.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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Based on the above, our Directors are satisfied that we will be able to maintain financial
independence from our Controlling Shareholders and their respective close associates after Listing.
CORPORATE GOVERNANCE MEASURES
In order to further safeguard the interests of our Shareholders, we will adopt the following
corporate governance measures to manage any potential conflicts of interest with our Controlling
Shareholders and their respective close associates:
(i) As part of our preparation for the Global Offering, we have amended our Articles of
Association to comply with the Listing Rules, which will become effective upon Listing.
In particular, our Articles of Association provides that, unless otherwise provided, a
Director shall abstain from voting on any resolution approving any contract, transaction
or arrangement in which such Director or any of his/her close associates has a material
interest, nor shall such Director be counted in the quorum present at the Board meeting;
(ii) where a transaction or arrangement of our Company is subject to Shareholders’ approval
under the provisions of the Listing Rules, any Controlling Shareholder that has a
material interest in the transaction or arrangement shall abstain from voting on the
resolution(s) approving the transaction or arrangement at the general meeting;
(iii) our Company has established internal control mechanisms to identify connected
transactions. Upon Listing, if our Company enters into connected transactions with our
Controlling Shareholders or any of their associates, our Company will comply with the
applicable requirements under the Listing Rules;
(iv) we are committed that our Board shall include a balanced composition of executive
Directors and non-executive Directors (including independent non-executive Directors).
We have appointed three independent non-executive Directors, who we believe possess
sufficient experience and are free from any business or other relationship which could
interfere in any material manner with the exercise of their independent judgment, and
will be able to provide an impartial, external opinion to protect the interests of our
Shareholders as a whole. For details of our independent non-executive Directors, please
see “Directors and Senior Management — Directors — Independent Non-Executive
Directors” in this prospectus; and
(v) we have appointed Somerley Capital Limited as our compliance advisor, which will
provide advice and guidance to us in respect of compliance with the applicable laws and
the Listing Rules including various requirements relating to directors’ duties and
corporate governance.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the issued share capital of our Company consisted of
261,756,700 A Shares with a nominal value of RMB1.00 each, all of which are listed on the
Shenzhen Stock Exchange.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following the completion of the Global Offering (assuming that (i) no new
Shares are issued under our 2024 Equity Incentive Plans, (ii) the Offer Size Adjustment Option is
not exercised and (iii) no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing Date), the issued share capital of our Company
will be as follows:
Number of Shares
Approximately %
of issued share
capital
A Shares in issue .................................. 261,756,700 88.21%
H Shares to be issued pursuant to the Global Offering ...... 35,000,000 11.79%
Total ............................................ 296,756,700 100.00%
OUR SHARES
Upon the completion of the Global Offering, our Shares will consist of A Shares and H
Shares. The A Shares and H Shares are all ordinary Shares in the share capital of our Company.
Apart from certain qualified domestic institutional investors in Chinese mainland, the qualified
investors in Chinese mainland under the Shenzhen-Hong Kong Stock Connect (if our H Shares are
eligible securities for that purpose) and other persons who are entitled to hold our H Shares
pursuant to relevant PRC laws or upon approvals of any competent authorities, H Shares generally
cannot be subscribed for by or traded between legal or natural persons in Chinese mainland.
Shenzhen-Hong Kong Stock Connect has established a stock connect mechanism between
Chinese mainland and Hong Kong. Our A Shares can be traded by investors in Chinese mainland,
qualified foreign institutional investors or qualified foreign strategic investors and must be traded
in Renminbi. As our A Shares are eligible securities under the Northbound Trading Link, they can
also be traded by Hong Kong and other overseas investors pursuant to the rules and limits of
Shenzhen-Hong Kong Stock Connect. If our H Shares are eligible securities under the Southbound
Trading Link, they can also be traded by investors in Chinese mainland in accordance with the
rules and limits of Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect.
SHARE CAPITAL
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Our A Shares and our H Shares are generally neither interchangeable nor fungible, and the
market prices of our A Shares and our H Shares may be different after the Global Offering. The
Guidelines on Application for “Full Circulation” of Domestic Unlisted Shares of H-share
Companies (H΅͡ሗ “ஷ”ˏ) announced by the CSRC are not
applicable to companies dual listed in the PRC and on the Stock Exchange. As of the Latest
Practicable Date, there were no relevant rules or guidelines from the CSRC providing that A
Shareholders may convert A shares held by them into H shares for listing and trading on the Stock
Exchange.
RANKING
Our A Shares and our H Shares are regarded as one class of Shares under our Articles of
Association and shall rank pari passu with each other in all other respects and, in particular, will
rank equally for dividends or distributions declared, paid or made after the date of this prospectus.
All dividends in respect of our H Shares are to be paid by us in Hong Kong dollars whereas all
dividends in respect of our A Shares are to be paid by us in Renminbi. In addition to cash,
dividends could also be distributed in the form of Shares. Holders of our H Shares will receive
share dividends in the form of H Shares, and holders of our A Shares will receive share dividends
in the form of A Shares.
APPROV AL FROM A SHAREHOLDERS REGARDING THE GLOBAL OFFERING
We obtained our A Shareholders’ approval to issue H Shares and seek the listing of H Shares
on the Stock Exchange at the general meeting of our Company held on June 5, 2025. Such
approval is subject to the following conditions:
(i) Size of the offer. The proposed number of H Shares to be offered shall not exceed 30%
of the total issued share capital enlarged by the H Shares to be issued pursuant to the
Global Offering;
(ii) Method of offering. The method of offering shall be by way of an international offering
to institutional investors and a public offer for subscription in Hong Kong;
(iii) Target investors. The H Shares shall be issued to public investors in Hong Kong under
the Hong Kong Public Offering and international investors, qualified domestic
institutional investors in Chinese mainland and other investors who are approved by
mainland Chinese regulatory bodies to invest abroad in International Offering;
SHARE CAPITAL
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(iv) Price determination basis. The issue price of the H Shares will be determined, among
others, after due consideration of the interests of existing shareholders of our Company,
acceptance of investors and the risks related to the offering, according to international
practice, through the demands for orders and book building process, subject to the
domestic and overseas capital market conditions and by reference to the valuation level
of comparable companies in domestic and overseas markets; and
(v) Validity period. The issue of H Shares and listing of H Shares on the Stock Exchange
shall be completed within 24 months from the date when the Shareholders’ meeting was
held on June 5, 2025.
There is no other approved offering plan for the Shares except the Global Offering.
GENERAL MEETINGS
For details of circumstance under which our general meetings are required, please see
“Summary of the Articles of Association — Shareholders and Shareholders’ General Meetings” in
Appendix V to this prospectus.
SHARE SCHEMES
For details of our share schemes, please see “Statutory and General Information — D. 2024
Equity Incentive Plans” in Appendix VI to this prospectus.
SHARE CAPITAL
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So far as our Directors are aware, immediately following the completion of the Global
Offering (assuming no changes to our issued and outstanding shares between the Latest Practicable
Date and the Listing), the following persons will have an interest or short position in Shares and/or
underlying Shares of our Company which would fall to be disclosed to our Company under the
provisions of Divisions 2 and 3 of Part XV of the SFO, or will be, directly or indirectly, interested
in 10% or more of the issued voting Shares of our Company.
Name of Shareholder Nature of interest (1)
Number of
Shares interested
in under the SFO
Class of
Shares
Shareholding
as of the
Latest
Practicable
Date in total
issued share
capital
Shareholding upon completion
of the Global Offering
in A Shares
in total issued
share capital (2)
Mr. WANG Ping (3) .... Beneficial owner 102,417,560 A Shares 39.13% 39.13% 34.51%
Interest in controlled
corporation
26,248,240 A Shares 10.03% 10.03% 8.85%
ZhaoGe Investment (3) .. Beneficial owner 26,248,240 A Shares 10.03% 10.03% 8.85%
Notes:
(1) All interests stated are long positions.
(2) The calculation is based on the total number of 296,756,700 Shares in issue immediately following the completion
of the Global Offering.
(3) As of the Latest Practicable Date, ZhaoGe Investment was ultimately controlled by Mr. WANG Ping as its general
partner. By virtue of the SFO, Mr. WANG Ping is deemed to be interested in the Shares held by ZhaoGe
Investment. For details, please see “History and Corporate Structure — Corporate Structure” in this prospectus.
For details of shareholders who will be, directly or indirectly, interested in 10% or more of
the issued voting shares of other members of our Group, please see “Statutory and General
Information — C. Further Information About Our Directors and Substantial Shareholders — 1.
Disclosure of Interests” in Appendix VI to this prospectus.
SUBSTANTIAL SHAREHOLDERS
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SHARE PLEDGES BY MR. W ANG PING
Mr. WANG Ping has from time to time pledged the A Shares he owned to certain PRC
financial institutions as collateral in order to obtain financing. As of the Latest Practicable Date,
Mr. WANG has pledged 12,850,000 A Shares, representing approximately 4.91% of the total issued
share capital of our Company. To the best knowledge of our Directors having made all reasonable
enquiries, there has not been any adverse credit records against Mr. WANG Ping in respect of any
breach of repayment obligations under his indebtedness. Mr. WANG Ping has confirmed that, if
any circumstances arise which results in a margin call or top-up mechanism being triggered under
any of the share pledges, Mr. WANG Ping shall take all necessary actions, such as provision of
additional collateral/and repayment of the relevant indebtedness, to ensure no enforcement of the
pledged A Shares will result.
SUBSTANTIAL SHAREHOLDERS
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OVERVIEW
Upon the Listing, our Board will comprise seven Directors, including four executive
Directors, and three independent non-executive Directors, namely:
Name Age Position
Date of joining
our Group
Date of appointment
as Director Roles and responsibilities
Relationship with
other Directors and
members of senior
management
Mr. WANG Ping
(ˮ̻) .......
46 Executive Director,
chairman of the
Board, and general
manager
June 1, 2009 May 7, 2015 Overall management,
strategic planning and
decision-making for key
business and operational
matters of our Group
N/A
Mr. DU Guobin
(Ӂ਷੸) ......
45 Executive Director
and vice chairman
of the Board
April 1, 2014 May 7, 2015 Overseeing business and
daily operations of our
Group and leading the
overall technology
development of our Group
N/A
Mr. XIA Youqing
(Ϟᅅ) ......
49 Executive Director,
vice general
manager and chief
financial officer
July 1, 2014 August 17, 2015 Overseeing the formulation
and execution of the
Group’s strategic direction,
business operations and
financial management
N/A
Mr. HUANG Min
(රઽ) .......
39 Executive Director,
secretary of the
Board, vice general
manager, and joint
company secretary
June 16, 2014 June 5, 2025 Responsible for the
Company’s securities
affairs, refinancing
initiatives, and other
capital market-related
matters
N/A
Mr. YANG Zheng
(݁).......
71 Independent
non-executive
Director
July 12, 2021 July 12, 2021 Providing independent advice
on the operations and
management of our Group
N/A
Dr. MA Lijun
(ࠏ)......
46 Independent
non-executive
Director
February 2, 2021 February 2, 2021 Providing independent advice
on the operations and
management of our Group
N/A
DIRECTORS AND SENIOR MANAGEMENT
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Name Age Position
Date of joining
our Group
Date of appointment
as Director Roles and responsibilities
Relationship with
other Directors and
members of senior
management
Ms. LIU Jia
(ᄎԳ) .......
38 Independent
non-executive
Director
Listing Date June 5, 2025 Providing independent advice
on the operations and
management of our Group
N/A
DIRECTORS
Executive Directors
Mr. W ANG Ping ( ˮ̻), aged 46, chairman of the Board, has served in our Group since June
2009. He has been our executive Director since January 2011 and has served as our general
manager since May 2015. Mr. Wang has also held various leadership roles in our subsidiaries,
including but not limited to, serving as general partner at Zhaoge Investment since June 2014,
executive director at Forge International Co., Ltd. (ʮ̡ ) since December 2014,
executive director at MeiG Zhilian since October 2018, and executive director at Shenzhen MeiG
Smart Investment Entrepreneur Investment Co., Ltd. (ʮ̡ ) since
December 2019. Mr. Wang is primarily responsible for the overall management, strategic planning
and decision-making for key business and operational matters of our Group.
Mr. Wang has over 23 years of experience in the telecommunication industry. From April
2002 to June 2009, he served as general manager at Shenzhen Mege Industrial Design Co., Ltd.
(ʮ̡ ). Mr. Wang has also held positions as an executive director at
Tiancheng Holdings (Shenzhen) Co., Ltd. (ٰ(ଉέ)ʮ̡), a company primarily
engaged in leasing and management of self-owned properties; Shenzhen Gaoxin Semiconductor
Technology Co., Ltd. (ʮ̡ ); a company primarily engaged in
development and sales of semiconductor devices; and Shenzhen Gaoxin Venture Investment Co.,
Ltd. (ʮ̡ ), a company primarily engaged in project and venture capital
investment, since September 2016, September 2018 and July 2021, respectively.
Mr. Wang obtained his college diploma in modern business operations and marketing from
Shenzhen University ( ଉέɽኪ) through distance learning by way of correspondence education in
the PRC in June 2000.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. DU Guobin ( Ӂ਷੸), aged 45, has been our executive Director. Mr. Du joined our
Group in April 2014 as vice general manager. He was appointed as vice chairman of the Board on
July 12, 2021. He served as our vice general manager from May 2015 to July 12, 2021. He is
primarily responsible for overseeing business and daily operations of our Group and leading the
overall technology development of our Group.
Mr. Du has over 20 years of experience in the R&D, design and technology management.
Prior to joining our Group, Mr. Du worked at Zhongfu Technology (Suzhou) Co., Ltd. (߅
Ҧ(ᘽψ)ʮ̡) from November 2003 to December 2004. From August 2006 to November
2008, he worked at Shanghai Simcom Limited (Ҧஔ (ɪऎ)ʮ̡). From July 2009
to February 2014, he served as general manager at Shanghai Xingge Information Technology Co.,
Ltd. (ʮ̡ ). Since June 2020, he has served as a director of MeiLink Co.,
Ltd. (ٟMeiLink). Since September 2020, he has been a director of ShuoGe Intelligent
Technology Co., Ltd. (ʮ̡ ), our affiliated company.
Mr. Du obtained his bachelor of engineering from Zhengzhou University ( ቍψɽኪ)i nt h e
PRC in July 2003 and his master’s degree in engineering from Shanghai Jiao Tong University ( ɪ
ऎʹஷɽኪ ) in the PRC in December 2007.
Mr. XIA Y ouqing (Ϟᅅ), aged 49, is our executive Director, vice general manager and
chief financial officer. He joined our Group in July 2014 and has served as our chief financial
officer since then. Mr. Xia was appointed as our Director and has served as our vice general
manager since October 2015. He is primarily responsible for overseeing the formulation and
execution of the Group’s strategic direction, business operations and financial management.
Mr. Xia has extensive experience in financial management and corporate governance. Prior to
joining our Group, Mr. Xia worked at Hunan China International Travel Service Agency Co., Ltd.
(ʮ̡ ) from April 2000 to September 2003. From January 2004 to
June 2005, he worked at Changsha Branch of Huizhou TCL Telingtong Mobile Communication
C o . ,L t d .(౉ψTCLӍʱʮ̡ ). From July 2005 to April 2009, he
worked at Shenzhen Kaihong Mobile Communication Co., Ltd. (ʮ̡ ).
From May 2009 to March 2011, he worked at Chongqing Guohong Technology Development Co.,
Ltd. (ʮ̡ ). He worked at Shenzhen Nianfu Supply Chain Co., Ltd. ( ଉέ
ʮ̡ ) from April 2012 to June 2014. Since June 19, 2020, Mr. Xia has been
serving as a director at MeiLink Corporation (ٟMeiLink). Since September 9, 2020, he has
been a director at ShuoGe Intelligent Technology Co., Ltd. (ʮ̡ ), our affiliated
company.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Xia obtained his bachelor’s degree in management from Hunan Business School (ਠ
ኪ৫) (currently known as Hunan University of Technology and Business (ʈਠɽኪ )) in the
PRC in June 1999. He also obtained the intermediate qualification in accountancy (ʕॴ) from
the Ministry of Finance of the People’s Republic of China (௅ ) in May 2005.
Mr. HUANG Min ( රઽ), aged 39, has been our executive Director since June 2025. He has
been our secretary of the Board and vice general manager since January 2018. He joined our
Group in June 2014 and has served as director of the general manager’s office since then. From
May 2015 to February 2018, Mr. Huang served as our securities affairs representative. From May
2015 to November 2017, he was our supervisor. He is primarily responsible for the Company’s
securities affairs, refinancing initiatives, and other capital market-related matters of our Group.
Prior to joining our Group, Mr. Huang worked at Shenzhen Blue Whale Ocean Engineering
Technology Co., Ltd. (ʮ̡ ). From May 2009 to March 2012, he
worked at Shenzhen Aerospace Science & Industry Shenzhen (Group) Co., Ltd. (ʈ
ʮ̡ ). From August 2012 to May 2014, he worked at Shenzhen Keleke Communication
Technology Co., Ltd. (ʮ̡ ).
Mr. Huang obtained his bachelor’s degree in arts from Hubei Normal College (ᇍኪ৫ )
(currently known as Hubei Normal University (ᇍɽኪ )) in the PRC in June 2008. He also
obtained the Qualification of Listed Company Board Secretary issued by Shenzhen Stock
Exchange in September 2017.
Independent Non-Executive Directors
Mr. YANG Zheng (݁)aged 71, has been our independent Director since July 12, 2021,
and was redesignated as an independent non-executive Director on June 5, 2025. He is primarily
responsible for providing independent advice on the operations and management of our Group.
Since June 2000, Mr. Yang has been a professor at Nanjing Audit University (ɽኪ ),
where he has been engaged in academic teaching and research in accounting. Since July 2019, Mr.
Yang has served as president of Shenzhen Rihao Intelligent Finance Research Institute ( ଉέ̹˚
Ӻ৫ ) where he has been responsible for strategic planning, academic research and
operational management. Mr. Yang also served as an independent director at various listed
companies, including (i) Anhui Xinke New Materials Co., Ltd. (ʮ̡ ), a
company whose shares are listed on the Shanghai Stock Exchange (stock code: 600255), from
November 2018 to December 2024; (ii) Lianmei Quantum Co., Ltd. (ʮ̡ ), a
company whose shares are listed on the Shanghai Stock Exchange (stock code: 600167) from
November 2018 to December 2024; (iii) Suzhou Vigon Technology Group Co., Ltd. (ࣸ
ʮ̡ ), a company whose shares are listed on the Shenzhen Stock Exchange
DIRECTORS AND SENIOR MANAGEMENT
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(stock code: 300331) from October 2021 to June 2024; and (iv) Sunpower Group Ltd. ( ʕ໋ණྠϞ
ʮ̡), a company whose shares are listed on the Singapore Exchange (stock code: 5GD), since
November 2017.
Mr. Yang obtained his bachelor’s degree in political economics from Anhui University ( τᏏ
ɽኪ) in the PRC in July 1982. He also obtained the qualification of Chinese certified public
accountant from The Chinese Institute of Certified Public Accountants (՘ึ )i n
May 2000. Mr. Yang was a member of the National Audit Information Standardization Technical
Committee (ึ ), and was awarded the second prize of the China
Standard Innovation Contribution Award ( ʕ਷ᅺ๟௴อ্ᘠᆤ ) in September 2009.
Dr. MA Lijun (ࠏ)aged 46, has been our independent Director since February 2, 2021,
and was redesignated as an independent non-executive Director on June 5, 2025. He is primarily
responsible for providing independent advice on the operations and management of our Group.
Since September 2007, Dr. Ma has worked at the Management School of Shenzhen University
(ଉέɽኪ), holding roles including lecturer, associate professor, professor and department head.
From October 2017 to October 2023, he was an independent director of Guangzhou Huayan
Precision Machinery Co., Ltd. (ʮ̡ ), a company whose shares are
listed on the Shenzhen Stock Exchange (stock code: 301138).
Dr. Ma obtained his bachelor’s degree in management science and computer science and
technology and his master’s degree in management science and engineering from University of
Science and Technology of China (ኪҦஔɽኪ ) in June 2001 and July 2003, respectively.
He obtained his Ph.D. degree in systems engineering and engineering management from The
Chinese University of Hong Kong (ಥʕ˖ɽኪ ) in December 2008.
Ms. LIU Jia ( ᄎԳ), aged 38, was appointed as our independent non-executive Director on
June 5, 2025 with effect from the Listing Date. She is primarily responsible for providing
independent advice on the operations and management of our Group.
Ms. Liu has abundant experience in corporate financing transactions, covering, among others,
cross-border mergers and acquisitions, initial public offerings, private equity investments, digital
assets, and compliance matters. From February 2013 to March 2014, she served at Greka Gas
China Ltd., primarily responsible for coordination and management of legal affairs of the group.
From May 2014 to May 2016, she served at Skadden, Arps, Slate, Meagher & Flom LLP, mainly
involving in legal services including corporate financings and initial public offerings. From June
2016 to June 2018, she served as a legal counsel at Tencent Technology (Shenzhen) Company
Limited (Ҧ(ଉέ)ʮ̡), primarily responsible for legal and compliance matters related
to the group’s investments, strategic transactions and general compliance. Since 2018, she has held
DIRECTORS AND SENIOR MANAGEMENT
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leadership roles at HashKey Group, including serving as head of legal department where she
provided comprehensive legal support for its operations in Hong Kong, Singapore, Japan, and
other jurisdictions, and oversaw the application and ongoing maintenance of regulatory licenses in
these regions. She has also been serving as chief executive officer of HashKey Group’s
tokenization businesses, leading the team in delivering comprehensive tokenization solutions and
execution services for premium projects and assets.
Ms. Liu obtained her bachelor’s degree of law from Law School of Shenzhen University ( ଉ
ኪ৫ ) in the PRC in May 2009 and her master’s degree of law from Law School of
University of San Francisco in the U.S. in June 2010. She also obtained the Legal Professional
Qualification Certificate of the PRC (ࣣin March 2016.
SENIOR MANAGEMENT
Our senior management team is responsible for the day-to-day management and operation of
our business. Mr. WANG Ping, Mr. DU Guobin, Mr. XIA Youqing and Mr. HUANG Min, our
executive Directors, are also members of our senior management. For their biographies, please see
“Directors — Executive Directors” in this section.
JOINT COMPANY SECRETARIES
Mr. HUANG Min , our secretary of the Board, was appointed as one of our joint company
secretaries on May 19, 2025. For the biographical details of Mr. Huang, please see “Senior
Management” in this section.
Mr. AU Kai Yin ( ᆄ઼ሬ) was appointed as one of our joint company secretaries on February
12, 2026. He is currently a company secretarial assistant manager at SWCS Corporate Services
Group (Hong Kong) Limited.
Mr. Au has over 10 years of experience in the field of corporate secretaries, with extensive
experience in handling corporate secretarial and corporate governance affairs for both listed and
private companies. He is an associate member of both The Hong Kong Chartered Governance
Institute and The Chartered Governance Institute in the United Kingdom. He holds a bachelor of
science degree in accounting from the University of Hull and a master of science degree in
corporate governance and compliance from Hong Kong Baptist University.
DIRECTORS AND SENIOR MANAGEMENT
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OTHER INFORMATION
Each of our Directors confirms that he or she (i) has obtained the legal advice referred to
under Rule 3.09D of the Listing Rules on June 12, 2025 and June 13, 2025, respectively; and (ii)
understands his or her obligations as a director of a listed issuer under the Listing Rules.
Each of the independent non-executive Directors confirms (i) his or her independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules; (ii) that he or
she has no past or present financial or other interest in the business of the Company or its
subsidiaries or any connection with any core connected person of our Company; and (iii) that there
are no other factors that may affect his or her independence at the time of his or her appointments.
Each of our Directors confirms that he or she does not have any interest in a business apart
from the business of our Group which competes or is likely to compete, whether directly or
indirectly, with our business, which would require disclosure under Rule 8.10 of the Listing Rules.
Except as disclosed above, none of our Directors or members of senior management held any
other directorships in public companies, the securities of which are listed on any securities market
in Hong Kong or overseas in the last three years immediately preceding the Latest Practicable
Date. None of our Directors or members of senior management is related to other Directors or
members of senior management.
Except as disclosed above, to the best knowledge, information and belief of the Directors
having made all reasonable inquiries, there was no information relating to our Directors that is
required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules, and there were no other
matters with respect to the appointment of the Directors that need to be brought to the attention of
the Shareholders.
MANAGEMENT AND CORPORATE GOVERNANCE
Board Committees
Audit Committee
Our Board has established the Audit Committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules and the Corporate Governance Code set out in Appendix C1 to
the Listing Rules (the “ Corporate Governance Code ”). The primary duties of the Audit
Committee are to review and supervise the financial reporting process and internal controls system
of our Group, review and approve connected transactions and provide advice and comments to the
DIRECTORS AND SENIOR MANAGEMENT
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Board. The Audit Committee comprises Mr. YANG Zheng, Dr. MA Lijun and Ms. LIU Jia, with
Mr. YANG Zheng (being our independent non-executive Director with appropriate professional
qualifications) as the chairperson.
Remuneration and Appraisal Committee
Our Board has established the Remuneration and Appraisal Committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and the Corporate Governance Code.
The primary duties of the Remuneration and Appraisal Committee are to review and make
recommendations to the Board on the terms of remuneration packages, bonuses and other
compensation payable to our Directors and other senior management. The Remuneration and
Appraisal Committee comprises Dr. MA Lijun, Mr. WANG Ping and Mr. YANG Zheng, with Dr.
MA Lijun as the chairperson.
Nomination Committee
Our Board has established the Nomination Committee with written terms of reference in
compliance with Rule 3.27A of the Listing Rules and the Corporate Governance Code. The
primary duties of the Nomination Committee are to make recommendations to our Board on the
appointment of Directors and management of Board succession. The Nomination Committee
comprises Dr. MA Lijun, Mr. YANG Zheng and Ms. LIU Jia, with Dr. MA Lijun as the
chairperson.
Strategy Committee
Our Board has established a Strategy Committee with written terms of reference. The primary
duties of the Strategy Committee are to research and make recommendations to our Board on our
long-term development strategies and major investment decisions. The Strategy Committee
comprises Mr. WANG Ping, Dr. MA Lijun and Mr. YANG Zheng, with Mr. WANG Ping as the
chairperson.
Corporate Governance
We aim to achieve high standards of corporate governance which are crucial to our
development and safeguard the interests of our Shareholders. In order to accomplish this, we
expect to comply with all applicable code provisions of the Corporate Governance Code upon
Listing save for the below.
DIRECTORS AND SENIOR MANAGEMENT
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Pursuant to code provision C.2.1 of the Corporate Governance Code as set out in Appendix
C1 to the Listing Rules, companies listed on the Stock Exchange are expected to comply with but
may choose to deviate from the requirement that the roles of chairman and chief executive should
be separate and should not be performed by the same individual. Our Company deviates from this
provision because Mr. WANG Ping, performs both the roles of the chairman of our Board and
chief executive officer of our Company. Our Board believes that, in view of his experience,
personal profile and understanding of our business operations as mentioned above, Mr. WANG
Ping is the Director best suited to identify strategic opportunities and focus of the Board. Vesting
the roles of both chairman and chief executive officer to Mr. WANG Ping can promote the
effective execution of strategic initiatives and facilitate the flow of information between
management and the Board.
Our Board considers that the balance of power and authority will not be impaired due to this
arrangement. In addition, all major decisions are made in consultation with members of the Board,
including the relevant Board committees, and independent non-executive Directors. Our Board will
reassess the division of the roles of chairman and the chief executive officer from time to time,
and may recommend dividing the two roles between different people in the future, taking into
account the circumstances of our Group as a whole.
Board Diversity
Our Company has adopted a board diversity policy which sets out the approach to achieve
diversity of the Board. We recognize and embrace the benefits of having a diverse Board and see
increasing diversity at the Board level, including gender diversity, as an essential element in
maintaining our competitive advantage and enhancing our ability to attract, retain and motivate
employees from the widest possible pool of available talent. In reviewing and assessing suitable
candidates to serve as a Director, the Nomination Committee will consider a number of aspects,
including, but not limited to, gender, age, cultural and educational background, professional
qualifications, skills, knowledge, and industry and regional experience.
Our Board currently consists of one female and six male Directors ranging from 38 to 71
years old with a balanced mix of knowledge and skills, including, but not limited to, overall
management and strategic development, accounting and corporate governance in addition to
industry experience in wireless communication. They obtained degrees in various majors including
electronics and communications engineering, financial management, business operations, English
and political economics. Taking into account our existing business model and specific needs, as
well as the diverse background of our Directors, the composition of our Board satisfies the board
diversity policy.
DIRECTORS AND SENIOR MANAGEMENT
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Our Nomination Committee will discuss periodically and when necessary, agree on the
measurable objectives for achieving diversity, including gender diversity, on the Board and
recommend them to the Board for adoption.
REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT
Our Directors receive remuneration in the form of fees, basic salaries, allowances and
benefits in kind, contributions to pension schemes and discretionary bonuses. We determine the
remuneration of our Directors based on their responsibilities, qualification, position and seniority.
The aggregate amount of remuneration of our Directors for the years ended December 31,
2022, 2023 and 2024 and the nine months ended September 30, 2025 were RMB5.4 million,
RMB5.1 million, RMB5.0 million and RMB2.3 million, respectively. None of our Directors
waived or agreed to waive any emolument during the same periods.
Under the arrangements in force at the date of this prospectus, we estimate the aggregate
remuneration payable to, and benefits in kind receivable by, our Directors by our Group in respect
of the year ending December 31, 2025 to be approximately RMB5.2 million.
The five highest paid individuals of our Group for the years ended December 31, 2022 and
2023 and 2024 and the nine months ended September 30, 2025 included three, three, two and nil
Director(s), respectively. During the same periods, the aggregate amount of remuneration of the
five highest paid individuals (including fees, basic salaries, allowances and benefits in kind,
share-based payments, contributions to pension schemes and discretionary bonuses) were RMB7.7
million, RMB6.5 million, RMB7.7 million and RMB5.8 million, respectively.
During the Track Record Period, no remuneration was paid to, or received by, our Directors
or the five highest paid individuals as an inducement to join or upon joining us. No compensation
was paid to, or received by, our Directors, former directors, or the five highest paid individuals for
the loss of office as a director of any member of our Group or of any other office in connection
with the management of the affairs of any member of our Group.
Save as disclosed above, no other payments have been made or are payable by our Group to
our Directors in respect of the Track Record Period.
DIRECTORS AND SENIOR MANAGEMENT
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2024 EQUITY INCENTIVE PLANS
In order to incentivize employees for their contribution to the Group and to attract and retain
suitable personnel to the Group, the Company adopted the 2024 Equity Incentive Plans. For further
details, please see “Statutory and General Information — D. 2024 Equity Incentive Plans” in
Appendix VI to this prospectus.
COMPLIANCE ADVISOR
We have appointed Somerley Capital Limited as our compliance advisor pursuant to Rule
3A.19 of the Listing Rules. The compliance advisor will provide us with guidance and advice as to
compliance with the requirements under the Listing Rules and applicable Hong Kong laws.
Pursuant to Rule 3A.23 of the Listing Rules, the compliance advisor will, amongst other things,
advise our Company in the following circumstances:
(a) before the publication of any regulatory announcement, circular, or financial report;
(b) where a transaction, which might be a notifiable or connected transaction, is
contemplated, including share issues, sales or transfers of treasury shares and share
repurchases;
(c) where we propose to use the proceeds of the Global Offering in a manner different from
that detailed in this prospectus or where our business activities, development or results
of our Group deviate from any forecast, estimate or other information in this prospectus;
and
(d) where the Stock Exchange makes an inquiry of our Company concerning unusual
movements in the price or trading volume of our listed securities or any other matters
under Rule 13.10 of the Listing Rules.
The term of appointment of our compliance advisor shall commence on the Listing Date and
is expected to end on the date on which we comply with Rule 13.46 of the Listing Rules in respect
of our financial results for the first full financial year commencing after the Listing Date.
DIRECTORS AND SENIOR MANAGEMENT
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THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone Investment
Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the cornerstone
investors set out below (each a “ Cornerstone Investor ”, and together the “ Cornerstone
Investors ”), pursuant to which the Cornerstone Investors have agreed to, subject to certain
conditions, subscribe, or cause their designated entities to subscribe, at the Offer Price, for such
number of Offer Shares (rounded down to the nearest whole board lot of 100 H Shares) that may
be purchased for an aggregate amount of approximately HK$458.52 million, calculated based on
an exchange rate of US$1.00 to HK$7.8162 (assuming an indicative Offer Price of HK$28.86
being the maximum Offer Price) and exclusive of brokerage fee, the SFC transaction levy, the
AFRC transaction levy and the Stock Exchange trading fee (the “ Cornerstone Placing ”).
Pursuant to paragraph 3.2 of Practice Note 18 to the Listing Rules, at least 40% of the total
number of Offer Shares initially offered in the Global Offering must be allocated to investors in
the placing tranche (other than Cornerstone Investors). As the Company is initially offering
approximately 10% of the total number of Offer Shares in the Hong Kong Public Offering, no
more than 50% of the total number of the Offer Shares initially offered in the Global Offering can
be allocated to all Cornerstone Investors (the “ Cornerstone Placing Allocation Limit ”). Each of
the Cornerstone Investors has agreed in their respective Cornerstone Investment Agreements that
the Company, the Sole Sponsor and the Overall Coordinators shall have the right to, in their sole
and absolute discretion, adjust the allocation of the number of Offer Shares to be subscribed for by
the relevant Cornerstone Investor to ensure compliance with the Listing Rules, including the
Cornerstone Placing Allocation Limit. Accordingly, the Company, the Sole Sponsor and the
Overall Coordinators will adjust the allocation of the number of Offer Shares to be subscribed for
by the Cornerstone Investors in proportion to their respective initial subscription amounts set out
in their respective Cornerstone Investment Agreements to ensure compliance with the Cornerstone
Placing Allocation Limit, and will disclose the number of the Offer Shares finally allocated to each
of the Cornerstone Investors in the allotment results announcement of the Company to be
published on or around Monday, March 9, 2026.
Based on the Offer Price of HK$28.86 per Offer Share, being the maximum Offer Price, the
total number of Offer Shares to be subscribed for by the Cornerstone Investors would be
15,887,400 H Shares. The table below reflects the shareholding percentage immediately after the
completion of the Global Offering assuming there is no other change made to the issued share
capital of the Company between the Latest Practicable Date and the Listing.
CORNERSTONE INVESTORS
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Assuming the Offer Size Adjustment Option is
not exercised
Assuming the Offer Size Adjustment Option is
exercised in full
% of the Offer Shares
% of the total issued
share capital % of the Offer Shares
% of the total issued
share capital
45.39% 5.35% 39.47% 5.26%
We believe that the Cornerstone Placing demonstrates the Cornerstone Investors’ confidence
in us and our business prospect, and that the Cornerstone Placing will help raise our profile. We
became acquainted with each of the Cornerstone Investors in its ordinary course of operation
through the Group’s business network or through introduction by the Company’s business partners
or the Underwriters in the Global Offering.
The Cornerstone Placing will form part of the International Offering, and, save as otherwise
obtained consent from the Stock Exchange, the Cornerstone Investors and their respective close
associates will not subscribe for any Offer Shares under the Global Offering (other than pursuant
to the Cornerstone Investment Agreements). The Offer Shares to be subscribed by the Cornerstone
Investors will rank pari passu in all respects with the fully paid H Shares in issue following the
Global Offering and will be counted towards the public float of the Company under Rule 8.08 of
the Listing Rules. Immediately following the completion of the Global Offering, the Cornerstone
Investors or their close associates will not, by virtue of their cornerstone investments, have any
Board representation in the Company, and none of the Cornerstone Investors and their close
associates will become a substantial Shareholder. Other than a guaranteed allocation of the relevant
Offer Shares at the final Offer Price, the Cornerstone Investors do not have any preferential rights
under each of their respective Cornerstone Investment Agreements, as compared with other public
Shareholders. There are no side arrangements or agreements between us and the Cornerstone
Investors or any benefit, direct or indirect, conferred on the Cornerstone Investors by virtue of or
in relation to the Listing, other than a guaranteed allocation of the relevant Offer Shares at the
final Offer Price, following the principles as set out in Chapter 4.15 of the Guide for New Listing
Applicants.
To our best knowledge and belief, (i) each of the Cornerstone Investors is an Independent
Third Party; (ii) none of the Cornerstone Investors is accustomed to taking instructions from us,
the Directors, chief executive, substantial Shareholders, existing Shareholders or any of their
respective subsidiaries or their respective close associates in relation to the acquisition, disposal,
voting or other disposition of the Offer Shares; (iii) none of the subscription of the relevant Offer
Shares by any of the Cornerstone Investors is financed by us, the Directors, chief executive,
substantial Shareholders, existing Shareholders or any of their respective subsidiaries or their
respective close associates; (iv) each Cornerstone Investor will be utilizing its internal financial
resources, financial resources of its shareholders or (in the case of Cornerstone Investors which are
funds or investment managers) the assets managed for its investors as its source of funding for the
CORNERSTONE INVESTORS
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subscription of the Offer Shares, and each Cornerstone Investor has sufficient funds to settle its
respective investment under the Cornerstone Placing; and (v) each of the Cornerstone Investors has
confirmed that all necessary approvals have been obtained with respect to the Cornerstone Placing
and that no specific approval from any stock exchange (if relevant) is required for the relevant
Cornerstone Placing. In addition, to the best knowledge of the Company, save as otherwise
disclosed, each of the Cornerstone Investors is independent from each other and makes
independent investment decisions.
The Cornerstone Investors have agreed to pay for the relevant Offer Shares that they have
subscribed for before dealings in the H Shares commence on the Stock Exchange. There will be no
delayed settlement of payment. Some of the Cornerstone Investors have agreed that, we, the Sole
Sponsor and the Overall Coordinators may in their sole discretion defer the delivery of all or part
of the Offer Shares it will subscribe for on a date later than the Listing Date. There will be no
delayed delivery. Where delayed delivery takes place, each of such Cornerstone Investors that may
be affected by such delayed delivery has agreed that it shall nevertheless pay for the relevant Offer
Shares before the Listing. Accordingly, there will be no deferred settlement of the Offer Shares to
be subscribed by the Cornerstone Investors.
Details of the actual number of Offer Shares to be allocated to the Cornerstone Investors will
be disclosed in the allotment results announcement of the Company to be published on or around
Monday, March 9, 2026.
To the best knowledge of the Company and the Overall Coordinators, and based on the
indicative interest of investment of the Cornerstone Investors and/or their close associates as of the
date of this prospectus, certain Cornerstone Investors and/or their close associates may participate
in the International Offering as placees and subscribe for further Offer Shares in the Global
Offering. The Company will seek the Stock Exchange’s consent and/or waiver to allow the
Cornerstone Investors and/or their close associates to participate in the International Offering as
placees pursuant to Chapter 4.15 of the Guide for New Listing Applicants. Whether such
Cornerstone Investors and/or their close associates will place orders in the International Offering
are uncertain and will be subject to the final investment decisions of such investors and the terms
and conditions of the Global Offering.
CORNERSTONE INVESTORS
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THE CORNERSTONE INVESTORS
The table below sets forth details of the Cornerstone Placing:
Assuming the Offer Size Adjustment Option is not
exercised
Assuming the Offer Size Adjustment Option is exercised
in full
Cornerstone Investor
Subscription
amount
(HK$) (1)(2)
Number of Offer
Shares (3)
Approximate %
of the
International
Offer Shares
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Approximate %
of the Offer
Shares (4)
Approximate %
of the Offer
Shares
Approximate %
of the issued
share capital
Based on the Offer Price of HK$28.86 (being the maximum Offer Price range)
Baoyue Lake Shenzhen Industrial
Investment Win-Win Enterprise
Management Limited ( ᘒ˜ಳଉପҳ΍ᙊ
ʮ̡ )( “ Baoyue
Win-Win ”) ............. 223,000,000 7,726,900 24.53% 22.08% 2.60% 21.03% 19.20% 2.56%
Meiko Elec. Hong Kong Co., Limited
(“Meiko HK ”)............ 39,081,000 1,354,100 4.30% 3.87% 0.46% 3.68% 3.36% 0.45%
Streamax Electronics Limited (ཥɿϞ
ʮ̡)( “ Streamax Electronics ”) ... 31,264,800 1,083,300 3.44% 3.10% 0.37% 2.95% 2.69% 0.36%
Harvest International Premium Value
(Secondary Market) Fund SPC on behalf
of Harvest Oriental SP (“ Harvest ”) ... 50,000,000 1,732,500 5.50% 4.95% 0.58% 4.71% 4.30% 0.57%
Jinyi Capital Multi-Strategy Fund SPC Ltd.
(“JinYi Capital ”) .......... 11,724,300 406,200 1.29% 1.16% 0.14% 1.11% 1.01% 0.13%
Open Wealth Management Limited ( කᆵৌ
ʮ̡ )( “ Open Wealth ”) ... 30,000,000 1,039,500 3.30% 2.97% 0.35% 2.83% 2.58% 0.34%
China Winning Limited
(“China Winning ”) ......... 23,448,600 812,400 2.58% 2.32% 0.27% 2.21% 2.02% 0.27%
Chau Tsang Cheong (׹)
“(Mr. Chau ”) ............ 50,000,000 1,732,500 5.50% 4.95% 0.58% 4.71% 4.30% 0.57%
Total................. 458,518,700 15,887,400 50.44% 45.39% 5.35% 43.23% 39.47% 5.26%
Notes:
(1) Exclusive of brokerage, the SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy,
and to be converted to Hong Kong dollars based on the exchange rate as disclosed in this prospectus.
(2) Each of the Cornerstone Investors has agreed in their respective Cornerstone Investment Agreements that the
Company, the Sole Sponsor and the Overall Coordinators shall have the right to, in their sole and absolute
discretion, adjust the allocation of the number of Offer Shares to be subscribed for by the relevant Cornerstone
CORNERSTONE INVESTORS
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Investor to ensure compliance with the Listing Rules, including the Cornerstone Placing Allocation Limit. The
Company, the Sole Sponsor and the Overall Coordinators will adjust the allocation of the number of Offer Shares to
be subscribed for by the Cornerstone Investors in proportion to their respective initial subscription amounts set out
in their respective Cornerstone Investment Agreements where necessary based on the final Offer Price and will
disclose the number of the Offer Shares finally allocated to each of the Cornerstone Investors in the allotment
results announcement of the Company to be published on or around Monday, March 9, 2026.
(3) Rounded down to the nearest whole board lot of 100 H Shares.
(4) Assuming that the Offer Size Adjustment Option is exercised in full to cover the excess demand in International
Offering.
The information about the Cornerstone Investors sets forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
Baoyue Win-Win
Baoyue Win-Win is wholly-owned by Nantong Baoyue Lake Shenchantou Win-Win
Enterprise Management Partnership (Limited Partnership) (ஷᘒ˜ಳଉପҳ΍ᙊΆุ၍ଣΥྫΆ
ุ(Υྫ)) (“ Baoyue Lake Shenchantou ”).
Baoyue Lake Shenchantou is a limited partnership established on January 7, 2026, with a
total capital contribution of RMB200.1 million. It was co-founded by Nantong Baoyue Lake
Technology Equity Investment Fund Partnership Enterprise (Limited Partnership) (Ҧ
ΥྫΆุ (Υྫ)) (“ Baoyue Lake Tech Fund I ”), Nantong Baoyue Lake Phase
II Technology Equity Investment Fund Partnership Enterprise (Limited Partnership) (ஷᘒ˜ಳɚ
ΥྫΆุ (Υྫ)) (“ Baoyue Lake Tech Fund II ”, together with Baoyue
Lake Tech Fund I, the “ Baoyue Lake Tech Funds ”), and Shenzhen New Capital Private Equity
Fund Management Co., Ltd. (ʮ̡ )( “ Shenchantou ”). Baoyue
Lake Shenchantou is managed by Shenchantou. As of the Latest Practicable Date, the partnership
interest in Baoyue Lake Shenchantou is held as to 84.96% by Baoyue Lake Tech Fund II as a
limited partner, 14.99% by Baoyue Lake Tech Fund I as a limited partner and 0.05% by
Shenchantou as a general partner.
The partnership interest in each of Baoyue Lake Tech Fund I and Baoyue Lake Tech Fund II
is held as to 99% by Nantong Kechuang Innovation Entrepreneurship Investment Management Co.,
Ltd. (ʮ̡ )( “ Nantong Kechuang Management ”) as a limited partner,
0.5% by Shenchantou as a general partner, and 0.5% by Nantong Baoyue Lake Kechuang
Investment Group Co., Ltd. (ʮ̡ )( “ Nantong Kechuang Group ”)
as a general partner. Both Nantong Kechuang Management and Nantong Kechuang Group are
ultimately controlled by the State-owned Assets Supervision and Administration Office of the
People’s Government of Chongchuan District, Nantong (਷Ϟ༟ପ္ຖ၍ଣ፬ʮ
CORNERSTONE INVESTORS
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܃The Baoyue Lake Tech Funds focus on developing industrial chains in four key sectors,
namely, integrated circuit semiconductors, new materials, high-end equipment, and healthcare.
Baoyue Lake Tech Funds cooperate with general partners at the sub-fund level that possess
industrial backgrounds or resources to establish corresponding industry-specific sub-funds,
primarily utilizing industrial corporate venture capital. This strategy promotes the synergistic
development of upstream and downstream enterprises within the industrial chain, forming an
ecosystem that unites funds and industries.
Shenchantou is an asset management company centered on technology innovation investment
and services. Its core management team possesses over a decade of experience in equity fund
management and operation. Leveraging its profound industrial backgrounds and investment
experience, the team focuses on strategic emerging industries to build an industrial investment
ecosystem that units industry, capital, and platforms. Shenchantou’s principal businesses include
the management of local government fund-of-funds, industrial direct investment fund management,
and industrial ecosystem services. Shenchantou is ultimately beneficially owned and controlled by
Ms. Dai Shuxiang (࠰an Independent Third Party.
Meiko HK
Meiko HK is wholly owned by Meiko Electronics Co., Ltd. (“ Meiko Elec ”), a Japan-based
company primarily engaging in the electronics field, with a core of printed circuit board design
and manufacturing technology, the shares of which are listed on the Tokyo Stock Exchange (TYO:
6787). As of March 31, 2025, none of the shareholders of Meiko Elec holds 30% or more interests
therein. We have procured PCB from a Meiko Elec’s subsidiary since 2019 and formed a joint
venture company in Japan, MeiLink Co., Ltd. (ٟMeiLink), with MeiKo Elec in 2020.
Streamax Electronics
Streamax Electronics is a company incorporated in Hong Kong with limited liability on May
31, 2013. It is principally engaged in the purchase and sale of electronic products and import and
export trade, information, network technology consulting and services. Streamax Electronics is a
wholly-owned subsidiary of Shenzhen Streamax Technology Co., Ltd. (ࠢ
ʮ̡)( “ Streamax Technology ”). Streamax Technology was incorporated in 2002 and is a
company listed on the Main Board of the Shenzhen Stock Exchange (stock code: 002970). It is an
AIoT intelligent IoT solutions provider with artificial intelligence and video technologies at its
core, focusing on improving the safety, compliance, and efficiency of commercial vehicles
(including logistics transportation vehicles, public transit vehicles, and special-purpose vehicles).
Streamax Technology is committed to enhancing the operational and driving safety of commercial
vehicles through artificial intelligence, high-definition video, big data, and advanced
driver-assistance technologies, improving fleet operating efficiency, helping customers reduce
CORNERSTONE INVESTORS
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traffic accidents and cargo losses, and ensuring that vehicles and driving behavior comply with
increasingly stringent regulatory requirements. During the Track Record Period, Streamax
Electronics is one of our customers of data transmission modules and smart modules and has
long-term business collaboration with us since 2018.
Harvest
Harvest Oriental SP (“ Harvest Oriental ”) is a fund launched in October 2024. Harvest
Oriental is a segregated portfolio of Harvest International Premium Value (Secondary Market)
Fund SPC, which is a segregated portfolio company incorporated in the Cayman Islands and is an
Independent Third Party. 91% of the management shares of Harvest International Premium Value
(Secondary Market) Fund SPC are held by Harvest Global Investments Limited (“ HGI”) and 9%
of the management shares are held by Harvest Global Capital Investments Limited (“ HGCI”).
Incorporated in Hong Kong in 2008, HGI is a wholly-owned subsidiary of Harvest Fund
Management Co., Ltd. (“ HFM”).
HFM is owned as to 40% by China Credit Trust Co., Ltd. (ப΂ʮ̡ )( “ China
Credit Trust ”), 30% by Lixin Investment Co., Ltd. (ப΂ʮ̡ )( “ Lixin
Investment ”) and 30% by DWS Investments Singapore Limited (“ DWS”), all of which are
Independent Third Parties. China Credit Trust was owned by China Credit Trust Co., Ltd., which is
held as to 32.92% by The People’s Insurance Company (Group) of China Limited (ᎈ
ʮ̡ ) (stock code:1339) where the Ministry of Finance of the People’s Republic of
China owns 60.84% of its total issued shares. Except for Tongyuan Holding Co., Ltd. (Ϟ
ʮ̡)( “ Tongyuan Holding ”)) owning 54% of the total issued shares of Lixin Investment, none
of the other shareholders held more than 30% interests therein. Tongyuan Holding was ultimately
controlled by Beijing Sai’ang Media Investment Co., Ltd (ʮ̡ ), which
was owned by Zhao Hongzheng (ּand Wang Boyu ( ˮЬ᲎) as to 65% and 35%,
respectively. None of ultimate beneficial owners of DWS holds 30% or more interests therein.
HGCI, the investment manager of Harvest Oriental on a discretionary basis, is a company
incorporated in Hong Kong in 2011 and licensed to carry out type 1 (dealing in securities), type 4
(advising on securities) and type 9 (asset management) regulated activities under the SFO in Hong
Kong by the SFC. HGCI is principally engaged in asset management and investment advisory
business. Chen Di, an Independent Third Party, is the beneficial owner who holds the largest
portion of the ultimate beneficial ownership of HGCI. Harvest Oriental has four participating
shareholders other than Chen Di, none of which holds 30% or more interests therein.
CORNERSTONE INVESTORS
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JinYi Capital
JinYi Capital is an exempted company incorporated in the Cayman Islands. JinYi (Tianjin)
Asset Management Co., Ltd. ( ආू(ݵ)ப΂ʮ̡ ) is the investment manager of
JinYi Capital and is ultimately controlled by Fan Xiang.
Save for Fan Xiang holding 65% of partnership interests in JinYi Capital, an Independent
Third Party, there is no other ultimate beneficial owner holding 30% or more interest therein. The
funding of JinYi Capital Multi-Strategy Fund SPC Ltd. — Structured Credit SP Fund, which is
participating in the Global Offering, are from Tsinghua University Education Foundation ( ૶ശɽ
ึ ). Tsinghua University Education Foundation was established in 1994 and is a
national non-public fundraising foundation registered with and approved by the Ministry of Civil
Affairs of the PRC, with the Ministry of Education of the PRC as its supervising authority.
Tsinghua University Education Foundation was initiated by Tsinghua University, with its funding
principally from social donations. Pursuant to the Interim Measures for the Administration of
Preservation and Appreciation of Assets of Charitable Organizations (ݺ
) and other applicable regulations, the foundation may invest in financial
products that comply with the relevant requirements, including but not limited to wealth
management products, publicly offered securities, private funds, and private asset management
products, for the purpose of preserving and enhancing the value of its assets and supporting the
development of educational and charitable causes.
Open Wealth
Open Wealth is an exempted company with limited liability incorporated in the Cayman
Islands, primarily engaging in investment. It is owned by You Yiyang (ݱand BD Capital
Investment Limited (ʮ̡ ), a company wholly owned by Bai Bin ( ͣⅳ), as to 75%
and 25%, respectively. Each of You Yiyang and Bai Bin is an Independent Third Party. Open
Wealth participates in this Global Offering as it recognizes the business prospects and growth
potential of the Company.
China Winning
China Wining was incorporated in the British Virgin Islands as a BVI business company,
primarily engaging in investment. It is wholly owned by Fok Kuong Investment Company Limited
(ʮ̡ ), a company owned by Huang Rongyao ( ර࿲ᘴ) and Liu Lingling (ഷ)a s
to 98% and 2%, respectively. Each of Huang Rongyao and Liu Lingling is an Independent Third
Party. China Winning participates in this Global Offering as it has faith in the Company’s business
performance and future development.
CORNERSTONE INVESTORS
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Mr. Chau
Mr. Chau is an individual investor with over 20 years of experience in construction industry
and also has experience in fund and stock investments. He is currently an executive director and
the sole shareholder of Eurostone Engineering Co Limited (ʮ̡ ), a company
incorporated in Hong Kong. Mr. Chau is an Independent Third Party. Mr. Chau participates in this
Global Offering as he recognizes the Company’s strong positioning in the IoT and intelligent
connected vehicle sectors and is confident in the Company’s business and prospects.
CLOSING CONDITIONS
The obligation of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the Underwriting Agreements for the Hong Kong Public Offering and the International
Offering being entered into and having become effective and unconditional (in
accordance with their respective original terms or as subsequently waived or varied by
agreement of the parties thereto) by no later than the time and date as specified in the
Underwriting Agreements, and neither of the aforesaid Underwriting Agreements having
been terminated;
(ii) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters);
(iii) the Stock Exchange having granted the approval for the listing of, and permission to
deal in, the H Shares (including the H Shares to be subscribed for by the Cornerstone
Investors) as well as other applicable waivers and approvals, and such approval,
permission or waiver having not been revoked prior to the commencement of dealings in
the H Shares on the Stock Exchange;
(iv) no laws shall have been enacted or promulgated by any governmental authorities which
prohibits the consummation of the transactions contemplated in the Global Offering or
in the respective Cornerstone Investment Agreements, and there shall be no orders or
injunctions from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions; and
CORNERSTONE INVESTORS
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(v) the respective agreements, representations, warranties, undertakings, confirmations and
acknowledgements of the relevant Cornerstone Investor under the respective
Cornerstone Investment Agreement are accurate and true in all respects and not
misleading and that there is no breach of the Cornerstone Investment Agreement on the
part of the relevant Cornerstone Investor.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at
any time during the period of six months from (and inclusive of) the Listing Date (the “ Lock-up
Period ”), dispose of, in any way, any of the Offer Shares or any interest in any company or entity
holding such Offer Shares that they have purchased pursuant to the relevant Cornerstone
Investment Agreement, save for certain limited circumstances, such as transfers to any of its
wholly-owned subsidiaries who will be bound by the same obligations of such Cornerstone
Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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FUTURE PLANS
Please see “Business — Our Strategies” for a detailed description of our future plans.
USE OF PROCEEDS
Based on the maximum Offer Price of HK$28.86 per H Share and assuming the Offer Size
Adjustment Option is not exercised, we estimate that we will receive net proceeds of
approximately HK$944.5 million (equivalent to approximately RMB838.6 million) from the Global
Offering after deducting the underwriting commission and other estimated expenses paid and
payable by us in connection with the Global Offering. In line with our strategies, we intend to use
our proceeds from the Global Offering for the purposes and in the amounts set forth below:
 approximately 55% of the net proceeds, or HK$519.6 million (equivalent to
approximately RMB461.3 million), are expected to be used for enhancing our R&D and
innovation capabilities.
(i) approximately 19% of the net proceeds, or HK$179.5 million (equivalent to
approximately RMB159.4 million), will be used for mid- to long-term R&D and
innovation in foundational technologies. Leveraging our expertise in wireless
connection, we will continue to align our research efforts with market trends and
customer needs, with a particular focus on 6G connection, SoC integration and
connection, integrated storage and computing technologies and AI agent
applications.
o approximately 12% of the net proceeds, or HK$113.3 million, are expected to
be used to recruit and retain approximately 90 to 110 R&D talents with
expertise in software and hardware development, testing, and product and
project management. The annual average salary for each talent is expected to
range from RMB150.0 thousand and RMB600.0 thousand. We plan to recruit
these talents by 2030;
o approximately 1% of the net proceeds, or HK$9.4 million, are expected to be
used to procure relevant software and hardware, including (i) hardware
primarily consisting of test equipment, such as millimeter-wave test
equipment, signal synthesis test equipment and simulation test equipment; and
(ii) software, primarily consisting of PCB simulation and electronics design
automation software; and
FUTURE PLANS AND USE OF PROCEEDS
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o approximately 6% of the net proceeds, or HK$56.7 million, are expected to
be used for platform licensing, such as the latest chip platforms developed by
our major suppliers, and testing fees related to the mid- to long-term R&D
and innovation in foundational technologies.
(ii) approximately 16% of the net proceeds, or HK$151.1 million (equivalent to
approximately RMB134.2 million), will be used to invest in the research and
development of modules and solutions applied in ICV , including 5G connection, AI
cockpit and integrated cabin and driving system, to meet the needs of global
automotive OEMs and Tier 1 suppliers in the automotive industry. Specifically,
o approximately 9% of the net proceeds, or HK$85.0 million, are expected to
be used to recruit and retain approximately 80 to 100 R&D talents with
expertise in software and hardware development, testing, and product and
project management. The annual average salary for each talent is expected to
range from RMB150.0 thousand and RMB600.0 thousand. We plan to recruit
these talents by 2030;
o approximately 2% of the net proceeds, or HK$18.9 million, are expected to
be used to procure relevant software and hardware, including (i) hardware
primarily consisting of test equipment, such as millimeter-wave test
equipment, signal synthesis test equipment and simulation test equipment; and
(ii) software, primarily consisting of PCB simulation and electronics design
automation software; and
o approximately 5% of the net proceeds, or HK$47.2 million, are expected to
be used for platform licensing, such as automotive-grade chip platforms
developed by our major suppliers, and testing fees related to the development
of modules and solutions applied in ICV .
(iii) approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), will be used to invest in the research and
development of modules and solutions applied in embodied AI, including
humanoid robots, industrial robots and service robots. Specifically, we plan to
develop (a) 5G and 5G-A connection products and (b) high-computing-power smart
modules applied in brain-inspired robotic cognition for embodied AI applications.
Specifically,
FUTURE PLANS AND USE OF PROCEEDS
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o approximately 6% of the net proceeds, or HK$56.7 million, are expected to
be used to recruit and retain approximately 50 to 70 R&D talents with
expertise in software and hardware development, testing, and product and
project management. The annual average salary for each talent is expected to
range from RMB150.0 thousand and RMB600.0 thousand. We plan to recruit
these talents by 2030;
o approximately 3% of the net proceeds, or HK$28.3 million, are expected to
be used to procure relevant software and hardware, including (i) hardware
primarily consisting of test equipment, such as millimeter-wave test
equipment, signal synthesis test equipment and simulation test equipment; and
(ii) software, primarily consisting of PCB simulation and electronics design
automation software; and
o approximately 1% of the net proceeds, or HK$9.4 million, are expected to be
used for platform licensing, such as 5G-A baseband chip platforms and
computing chip platforms for industrial applications and robotics developed
by our major suppliers, and testing fees related to the development of
modules and solutions applied in embodied AI.
(iv) approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), will be used to invest in the research and
development of high-computing-power smart modules in on-device AI applications
in response to the transition from data transmission modules to modules that
emphasize intelligence and high computing power in the wireless communication
module industry and our vision to meet the growing demand from our overseas
customers for smart applications. Specifically, we plan to (a) continue to develop
new high-computing-power smart modules, including those with higher computing
power; (b) expand the compatibility of our high-computing-power smart modules
with AI technologies such as base AI, generative AI and cloud AI; and (c) apply
our high-computing-power smart modules and solutions embedded with AI
technologies to application scenarios such as AR/VR, robotic vision and consumer
IoT. Specifically,
o approximately 6% of the net proceeds, or HK$56.7 million, are expected to
be used to recruit and retain approximately 40 to 60 R&D talents with
expertise in software and hardware development, testing, and product and
project management. The annual average salary for each talent is expected to
range from RMB150.0 thousand and RMB600.0 thousand. We plan to recruit
these talents by 2030;
FUTURE PLANS AND USE OF PROCEEDS
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o approximately 2% of the net proceeds, or HK$18.9 million, is expected to be
used to procure relevant software and hardware, including (i) hardware
primarily consisting of test equipment, such as millimeter-wave test
equipment, signal synthesis test equipment and simulation test equipment; and
(ii) software, primarily consisting of PCB simulation and electronics design
automation software; and
o approximately 2% of the net proceeds, or HK$18.9 million, are expected to
be used for platform licensing and testing fees related to the development of
the on-device AI applications.
The table below sets forth some details of our latest products to be developed:
Product name Application sector Stage Timeline
48 TOPS high-computing-power
modules customized for intelligent
cockpits for large automobile
factories .....................
ICV Under R&D To be
commercialized in
2026
high-computing-power modules based
on Supplier A’s latest chip
platform
(1) ...................
General IoT Under R&D To be
commercialized in
2026
high-computing-power modules based
on a domestically produced chip
platform .....................
General IoT Under R&D To be
commercialized in
2026
high-computing power intelligent
cockpit module based on Supplier
A’s next-generation chip
platform
(1) ...................
ICV Pre-planning
and design
To be set up in 2025,
under R&D in
2026, and
commercialized in
2027
high-computing power module based
on Supplier A’s chip platform
(1) ...
General IoT Pre-planning
and design
To be set up in 2026,
and
commercialized in
2027
Note:
(1) Different chip platforms represent distinct hardware and software foundation, and thus require our dedicated
development efforts for specific design, compatibility and optimization work to ensure our module products based
on different chip platforms meet the desired performance and functionality.
FUTURE PLANS AND USE OF PROCEEDS
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The following table sets forth the expected implementation timetable of our planned use of
proceeds expected to be used for enhancing our R&D and innovation capabilities:
Y ear ended December 31,
2026 2027 2028 2029 2030 Total
(Hong Kong dollars in millions)
R&D and innovation capabilities 86.9 90.4 100.9 111.3 130.1 519.5
Mid- to long-term R&D and
innovation in foundational
technologies ............. 23.9 30.2 35.3 42.6 47.5 179.5
Recruit and retain R&D
talents ................ 9.9 15.1 24.0 30.2 34.2 113.3
Software and hardware ..... 4.7 4.7 — — — 9.4
Platform licensing and testing
fees .................. 9.4 10.3 11.3 12.3 13.3 56.7
R&D of modules and solutions
applied in ICV ........... 23.1 24.0 30.9 32.7 40.4 151.1
Recruit and retain R&D
talents ................ 5.3 11.5 18.3 22.1 27.9 85.0
Software and hardware ..... 11.4 4.8 2.7 — — 18.9
Platform licensing and testing
fees .................. 6.4 7.8 9.9 10.6 12.5 47.2
R&D of modules and solutions
applied in embodied AI .... 20.9 22.0 15.7 15.7 20.3 94.5
Recruit and retain R&D
talents ................ 3.6 7.5 11.3 14.9 19.3 56.7
Software and hardware ..... 13.8 10.8 3.8 — — 28.3
Platform licensing and testing
fees .................. 3.5 3.7 0.6 0.8 0.9 9.4
R&D of high-computing-power
smart modules in on-device
AI applications ........... 19.0 14.2 19.0 20.3 21.9 94.5
Recruit and retain R&D
talents ................ 3.2 7.2 12.7 16.1 17.4 56.7
Software and hardware ..... 12.9 3.5 2.5 — — 18.9
Platform licensing and testing
fees .................. 2.9 3.5 3.8 4.2 4.5 18.9
FUTURE PLANS AND USE OF PROCEEDS
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 approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), are expected to be used for expanding our overseas
sales network and promoting our products in overseas markets. Specifically,
o approximately 9% of the net proceeds, or HK$85.0 million, are expected to be
used to recruit and retain 30 to 40 sales and service personnels with extensive
overseas sales experience and an understanding of international markets to enhance
our development and retainment of overseas customers. The annual average salary
for each talent is expected to range from RMB300.0 thousand and RMB1.1 million.
We plan to recruit these personnels by 2030.
Specifically:
(i) building upon our existing subsidiaries in Düsseldorf, Germany and Paris,
France, we intend to moderately expand our European team primarily through
recruiting approximately 20 sales and customer support personnels with
extensive overseas sales experience and an understanding of local markets to
enhance our development and retainment of overseas customers. The
expansion will mainly be concentrated in key European markets, particularly
Germany and France, with the primary objective of deepening our market
penetration in these regions;
(ii) we also plan to explore the expansion of our presence in North America,
which may lead to us establishing a representative office or a subsidiary in
San Diego, California, the United States, subject to market conditions and
strategic evaluation. The objective would be to establish a local team to more
effectively cultivate and serve the significant North American market. As of
the Latest Practicable Date, no such representative office or subsidiary had
been established. Subject to future implementation, we anticipate that the
proposed entity would initially have a staff size of approximately 10
personnels, with the timing of establishment to be determined based on our
business development progress and market conditions;
(iii) we also consider establishing a new branch in the Southeastern Asia market,
such as Singapore. This is intended to serve as a new strategic platform for
both overseas procurement and sales. We believe this would provide us with
greater operational flexibility in managing our international supply chain and
sales activities, particularly within the Asia-Pacific region.
FUTURE PLANS AND USE OF PROCEEDS
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o approximately 1% of the net proceeds, or HK$9.4 million, are expected to be used
to rent office space for our new sales center to expand our sales coverage and
provide prompt sales services to overseas customers. Specifically, we plan to (i)
establish stable relationships with potential customers overseas by establishing our
international sales and service teams, deepening collaboration with key technology
partners, and leveraging experienced overseas business consultant partners to
expand our customer base in major markets, including leading companies in their
respective local markets in regions such as Japan, Europe and the U.S.; (ii) extend
our business outreach targeting overseas Tier 1 automobile suppliers; (iii) provide
technical and cost evaluations tailored to the needs of overseas customers; and (iv)
offer more competitive pricing.
 approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), are expected to be used for strategic investments
and/or acquisition to achieve our long-term growth strategies. We seek potential
investment and acquisition opportunities in both domestic and international markets, aim
to expand our product portfolio, enhance our market reach and fortify our supply chain
capabilities. Our search for the target will be driven primarily by the pursuit of business
and strategic synergies. We will evaluate investment and/or opportunities in the wireless
communication module industry and plan to invest in and/or acquire domestic and/or
international chip R&D companies, software companies and early-stage hardware
companies to secure our supply chain and expand our design capabilities and product
portfolio. The target should have (i) strong R&D capabilities, especially on AI
technologies, that are complementary to our technologies; (ii) industry experience and
insight on wireless communication modules and solutions; (iii) extensive experience
with, and recognition among, consumers; or (iv) product or service offerings that are
synergistic with our business and improve our design and commercialization efficiency.
Such targets may include upstream players, such as suppliers of key electronic
components or innovative technologies, to strengthen our supply chain and technological
foundations. We may also consider investments in downstream business players involved
in end-product application sectors to accelerate the adoption of our modules and gain
deeper market insights. We do not have any geographical limit on the search of targets.
According to Frost & Sullivan, it is estimated that there could be more than 50 targets
that meet the above criteria. Our Directors believe that the amount of available targets is
consistent with our need and expect that there will be more targets as the industry
evolves. Through effective industry resource integration, we will strengthen our
competitive positioning and drive sustainable long-term value creation. As of the Latest
Practicable Date, we had not identified any specific acquisition or investment target.
FUTURE PLANS AND USE OF PROCEEDS
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 approximately 15% of the net proceeds, or HK$141.7 million (equivalent to
approximately RMB125.8 million), are expected to be allocated for the repayment of
certain interest-bearing bank borrowings, with interest rates ranging between 1.95% and
2.27% that are maturing after June 2025, so as to optimize our financial structure and
reduce our borrowing cost. We incurred such borrowings primarily for working capital
purposes.
 approximately 10% of the net proceeds, or HK$94.5 million (equivalent to
approximately RMB83.9 million), are expected to be used for working capital and
general corporate uses.
To the extent that the net proceeds from the Global Offering are more or less than expected
(including as a result of the Offer Price being set at a price lower than the maximum Offer Price),
we will adjust our allocation of the net proceeds for the above purposes on a pro rata basis.
If any part of our development plan does not proceed as planned for reasons such as changes
in government policies that would render the development of any of our projects not viable, or the
occurrence of force majeure events, we will carefully evaluate the situation and may reallocate the
net proceeds from the Global Offering.
To the extent that the net proceeds of the Global Offering are not immediately used for the
above purposes or if we are unable to put into effect any part of our plan as intended, and to the
extent permitted by the relevant laws and regulations, we will only deposit such net proceeds into
short-term interest-bearing accounts at licensed commercial banks and/or other authorized financial
institutions (as defined under the Securities and Futures Ordinance or the applicable laws and
regulations in other jurisdictions). In such event, we will comply with the appropriate disclosure
requirements under the Listing Rules.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Overall Coordinators
China International Capital Corporation Hong Kong Securities Limited
BNP Paribas Securities (Asia) Limited
Capital Market Intermediaries
China Industrial Securities International Capital Limited
Futu Securities International (Hong Kong) Limited
Tiger Brokers (HK) Global Limited
Open Securities Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering. The
Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a conditional
basis. The International Offering is expected to be fully underwritten by the International
Underwriters. If, for any reason, the Offer Price is not agreed between the Overall Coordinators
and our Company, the Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 3,500,000 Hong
Kong Offer Shares and the International Offering of initially 31,500,000 International Offer
Shares, subject, in each case, to reallocation on the basis as described in the section headed
“Structure of the Global Offering” in this prospectus.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering initially
3,500,000 Hong Kong Offer Shares (subject to reallocation and the Offer Size Adjustment Option)
for subscription by way of the Hong Kong Public Offering on and subject to the terms and
conditions of this prospectus and the Hong Kong Underwriting Agreement at the Offer Price.
UNDERWRITING
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Subject to (i) the Listing Committee granting approval for the listing of, and permission to
deal in, the H Shares pursuant to the Global Offering (including additional H Shares which may be
issued pursuant to the exercise of the Offer Size Adjustment Option) on the Main Board of the
Stock Exchange and such approval not having been withdrawn; and (ii) certain other conditions set
out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed
severally and not jointly to apply or procure applications, on the terms and conditions of this
prospectus, for their respective applicable proportions of the Hong Kong Offer Shares which are
being offered but are not taken up under the Hong Kong Public Offering.
The Hong Kong Underwriting Agreement is conditional on, among other things, the
International Underwriting Agreement having been signed and becoming unconditional and not
having been terminated in accordance with its terms.
Grounds for Termination
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters and
the Capital Market Intermediaries) and the Sole Sponsor shall be entitled, in its absolute discretion
and by giving notice to our Company, to terminate the Hong Kong Underwriting Agreement with
immediate effect if prior to 8:00 a.m. on the Listing Date:
there develops, occurs, exists or comes into force:
(a) any new law or regulation or any change or development involving a prospective change
or any event or series of events or circumstances likely to result in a change or a
development involving a prospective change in existing laws or regulations, or the
interpretation or application thereof by any court or any competent authority in or
affecting Hong Kong, the PRC, the United States, the European Union (or any member
thereof), or other jurisdictions where the Group operates, or relevant to the Group or the
Global Offering (each a “ Relevant Jurisdiction ” and collectively, the “ Relevant
Jurisdictions ”); or
(b) any change or development involving a prospective change, or any event or series of
events or circumstances likely to result in a change or prospective change, in any local,
national, regional or international financial, political, military, industrial, economic,
fiscal, legal, regulatory, currency, credit or market conditions or sentiments, taxation,
equity securities or currency exchange rate or controls or any monetary or trading
settlement system, or foreign investment regulations (including, without limitation, a
devaluation of the Hong Kong dollar, United States dollar or Renminbi against any
foreign currencies, a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or the Renminbi is linked to any
UNDERWRITING
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foreign currency or currencies) or other financial markets (including, without limitation,
conditions and sentiments in stock and bond markets, money and foreign exchange
markets, the inter-bank markets and credit markets) in or affecting any Relevant
Jurisdictions, or affecting an investment in the Offer Shares; or
(c) any event or series of events, or circumstances in the nature of force majeure (including,
without limitation, any acts of government, declaration of a regional, national or
international emergency or war, calamity, crisis, economic sanctions, strikes, labor
disputes, other industrial actions, lock-outs, fire, explosion, flooding, tsunami,
earthquake, volcanic eruption, civil commotion, riots, rebellion, public disorder,
paralysis in government operations, acts of war, epidemic, pandemic, outbreak or
escalation, mutation or aggravation of diseases, accident or interruption or delay in
transportation, local, national, regional or international outbreak or escalation of
hostilities (whether or not war is or has been declared), act of God or act of terrorism
(whether or not responsibility has been claimed)) in or affecting any of the Relevant
Jurisdictions; or
(d) the imposition or declaration of any moratorium, suspension or limitation (including
without limitation, any imposition of or requirement for any minimum or maximum
price limit or price range) on (i) the trading in shares or securities generally on the
Stock Exchange, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the
Tokyo Stock Exchange, the Singapore Stock Exchange, the New York Stock Exchange,
the NASDAQ Global Market or the London Stock Exchange; or (ii) the trading in any
securities of our Company listed or quoted on a stock exchange or an over-the-counter
market; or
(e) the imposition or declaration of any general moratorium on banking activities in or
affecting any of the Relevant Jurisdictions or any disruption in commercial banking or
foreign exchange trading or securities settlement or clearing services, procedures or
matters in or affecting any of the Relevant Jurisdictions; or
(f) other than with the prior written consent of the Overall Coordinators, the issue or
requirement to issue by our Company of a supplement or amendment to this Prospectus
or other documents in connection with the offer and sale of the Offer Shares pursuant to
the Companies (Winding Up and Miscellaneous Provisions) Ordinance or the Listing
Rules or upon any requirement or request of the Stock Exchange and/or the SFC; or
(g) the commencement by any authority or other regulatory or political body or organization
of any public action or investigation against a group company or a director or a senior
management member of our Company as named in this Prospectus; or
UNDERWRITING
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--- page 401 ---
(h) the imposition of sanctions or export controls in whatever form, directly or indirectly,
on any group company or any of the Controlling Shareholders or by or on any Relevant
Jurisdiction, or the withdrawal of trading privileges which existed on the date of the
Hong Kong Underwriting Agreement, in whatever form, directly or indirectly, by, or for,
any Relevant Jurisdiction; or
(i) any valid demand by creditors for payment or repayment of indebtedness of any member
of the Group or in respect of which any member of the Group is liable prior to its stated
maturity; or
(j) any non-compliance of this Prospectus (or any other documents used in connection with
the contemplated offering, allotment, issue, subscription or sale of any of the Offer
Shares), the CSRC filings or any aspect of the Global Offering with the Listing Rules or
any other applicable laws; or
(k) any litigation, dispute, legal action or claim or regulatory or administrative investigation
or action being threatened, instigated or announced against any member of the Group or
any Controlling Shareholder or any Director or senior management members as named
in this Prospectus; or
(l) any contravention by any group company or any Director of the Listing Rules or
applicable Laws; or
(m) that the chairman of the Board, any Director or any member of senior management of
our Company named in this Prospectus seeks to retire, or is removed from office or
vacating his/her office; or
(n) any Director or any member of senior management of our Company named in this
Prospectus is being charged with an indictable offence or prohibited by operation of law
or otherwise disqualified from taking part in the management or taking directorship of a
company; or
(o) an order or petition is presented for the winding-up or liquidation of any member of the
Group, or any member of the Group makes any composition or arrangement with its
creditors or enters into a scheme of arrangement or any resolution is passed for the
winding-up of any member of the Group or a provisional liquidator, receiver or manager
is appointed over all or part of the assets or undertaking of any member of the Group or
anything analogous thereto occurs in respect of any member of the Group; or
UNDERWRITING
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--- page 402 ---
(p) any change or prospective change, or a materialization of, any of the risks set out in the
section headed “Risk Factors” in this Prospectus,
which, in any such case individually or in the aggregate, in the sole and absolute opinion of
the Sole Sponsor and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters):
(A) has or will or may have a material adverse effect;
(B) has or will or may have a material adverse effect on the success of the Global
Offering or the level of applications under the Hong Kong Public Offering or the
level of indications of interest under the International Offering; or
(C) makes or will make or may make it impracticable, inadvisable, inexpedient or
incapable for any material part of the Hong Kong Underwriting Agreement, the
Hong Kong Public Offering or the Global Offering to be performed or
implemented as envisaged, or for the Hong Kong Public Offering and/or the Global
Offering to proceed, or to market the Global Offering or the delivery or
distribution of the Offer Shares on the terms and in the manner contemplated by
the offering documents; or
(D) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or preventing the processing of applications and/or
payments pursuant to the Global Offering or pursuant to the underwriting thereof;
or
there has come to the notice of the Sole Sponsor and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
(q) any statement contained in any of the offering documents, the CSRC filings and/or any
notices, announcements, advertisements, communications or other documents issued or
used by or on behalf of our Company in connection with the Hong Kong Public
Offering (including any supplement or amendment thereto) (the “ Global Offering
Documents ”) was, when it was issued, or has become untrue, incorrect, inaccurate in
any material respect or misleading; or that any estimate, forecast, expression of opinion,
intention or expectation contained in any such documents, was, when it was issued, or
has become unfair or misleading in any respect or based on untrue, dishonest or
unreasonable assumptions or given in bad faith; or
UNDERWRITING
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(r) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this Prospectus, constitute a material
omission or misstatement in any Global Offering Document; or
(s) any breach of, or any event or circumstance rendering untrue or incorrect or misleading
in any respect, any of the representations, warranties and undertakings given by our
Company in the Hong Kong Underwriting Agreement or the International Underwriting
Agreement; or
(t) any event, act or omission which gives rise or is likely to give rise to any liability of the
indemnifying party pursuant to the indemnities in the Hong Kong Underwriting
Agreement; or
(u) any breach of any of the obligations or undertakings imposed upon our Company to the
Hong Kong Underwriting Agreement; or
(v) there is any change or development involving a prospective change, constituting or
having a material adverse effect; or
(w) our Company withdraws this Prospectus (and/or any other documents used in connection
with the subscription or sale of any of the Offer Shares pursuant to the Global Offering)
or the Global Offering; or
(x) that the approval by the Listing Committee of the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering (including
pursuant to any exercise of the Offer Size Adjustment Option) is refused or not granted,
other than subject to customary conditions, on or before the Listing Date, or if granted,
the approval is subsequently withdrawn, cancelled, qualified (other than by customary
conditions), revoked or withheld; or
(y) any person (other than any of the Sole Sponsor) has withdrawn its consent or sought to
withdraw its consent to the issue of any of the offering documents, to the issue of the
offering documents with the inclusion of its reports, letters and/or legal opinions (as the
case may be) and references to its name included in the form and context in which it
respectively appears; or
(z) any prohibition on our Company for whatever reason from offering, allotting, issuing or
selling any of the Offer Shares (including pursuant to any exercise of the Offer Size
Adjustment Option) pursuant to the terms of the Global Offering; or
UNDERWRITING
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(aa) the notice of acceptance of the CSRC filings issued by the CSRC and/or the results of
the CSRC filings published on the website of the CSRC is rejected, withdrawn, revoked
or invalidated; or (B) other than with the prior written consent of the Overall
Coordinators, the issue or requirement to issue by our Company of a supplement or
amendment to the CSRC filings pursuant to the CSRC rules or upon any requirement or
request of the CSRC; or (C) any non-compliance of the CSRC filings with the CSRC
rules or any other applicable laws; or
(bb) that (i) a material portion of the orders placed or confirmed in the bookbuilding process
or (ii) any investment commitment made by any cornerstone investors under the
cornerstone investment agreements signed with such cornerstone investors, have been
withdrawn, terminated or cancelled, as a result of the payment of the relevant
investment amount not being received or settled in the stipulated time and manner or
otherwise.
Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by our Controlling Shareholders
Pursuant to Rule 10.07 of the Listing Rules, each of our Controlling Shareholders has
undertaken to us and to the Stock Exchange that, except pursuant to the Global Offering, he/it
shall not, and shall procure that the relevant registered holders of the Shares in which he/it is
beneficially interested shall not:
(a) in the period commencing on the date by reference to which disclosure of his/its
shareholding is made in this prospectus and ending on the date which is six months
from the Listing Date (the “ First Six-month Period ”), dispose of, or enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of, any of the Shares in respect of which he/it is shown by this
prospectus to be the beneficial owner (as defined in the Listing Rules (the “ Relevant
Securities ”)); and
(b) in the period of six months commencing on the date on which the First Six-month
Period expires (the “ Second Six-month Period ”), dispose of, nor enter into any
agreement to dispose of or otherwise create any options, rights, interests or
encumbrances in respect of the Relevant Securities if, immediately following such
disposal or upon the exercise or enforcement of such options, rights, interests or
encumbrances, that, he/it would cease to be our controlling shareholder.
UNDERWRITING
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In addition, pursuant to Note (3) to Rule 10.07(2) of the Listing Rules, each of our
Controlling Shareholders has also irrevocably undertaken to the Stock Exchange and us that,
within the period commencing on the date of this prospectus and ending on the date which is 12
months from the Listing Date, he/it will:
(a) when he/it pledges or charges any Shares or securities of our Company beneficially
owned by him/it in favor of an authorized institution (as defined in the Banking
Ordinance, Chapter 155 of the Laws of Hong Kong) pursuant to Note (2) to Rule
10.07(2) of the Listing Rules, immediately inform us in writing of such pledge or charge
together with the number of securities so pledged or charged; and
(b) when he/it receives any indications, either verbal or written, from any pledgee or
chargee that any of the pledged or charged Shares or securities of our Company will be
disposed of, immediately inform us in writing of any such indications.
We will inform the Stock Exchange as soon as we have been informed of the above matters
(if any) by any of our Controlling Shareholders and announce such as soon as possible after being
so informed by any of our Controlling Shareholders.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Pursuant to the Hong Kong Underwriting Agreement, our Company has undertaken to each of
the Sole Sponsor, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Hong Kong Underwriters and the Capital Market Intermediaries not
to, without the prior written consent of the Sole Sponsor and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters and the Capital Market Intermediaries)
and unless in compliance with the Listing Rules during the period commencing on the date of the
Hong Kong Underwriting Agreement and ending on, and including, the last date of the six months
after the Listing Date (the “ First Six-Month Period ”):
(i) offer, allot, issue, sell, accept subscription for, contract to allot, issue or sell, contract or
agree to allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or
sell any option, warrant, right or contract to purchase, purchase any option or contract to
sell, grant or agree to grant any option, right or warrant to purchase or subscribe for, or
otherwise transfer or dispose of or create an encumbrance under the Hong Kong
Underwriting Agreement (the “ Encumbrance ”) over, or agree to transfer or dispose of
or create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, or repurchase, any legal or beneficial interest in any H Shares or other
UNDERWRITING
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equity securities of our Company, as applicable, or any interests in any of the foregoing
(including, but not limited to, any securities that are convertible into or exercisable or
exchangeable for, or that represent the right to receive, or any warrants or other rights to
subscribe for, any H Shares or other equity securities of our Company, as applicable, or
any interests in any of the foregoing), or deposit any H Shares or other equity securities
of our Company, as applicable, with a depositary in connection with the issue of
depositary receipts); or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of subscription or ownership (legal or beneficial) of
any H Shares or other equity securities of our Company, as applicable, or any interest
therein (including, without limitation, any securities of which are convertible into or
exchangeable or exercisable for, or represent the right to receive, or any warrants or
other rights to purchase, any H Shares or other equity securities of our Company, as
applicable, or any interests in any of the foregoing); or
(iii) enter into any transaction with the same economic effect as any transaction described in
paragraphs (i) or (ii) above; or
(iv) offer to or contract to or agree to or announce, or publicly disclose that our Company
will or may enter into any transaction described in paragraphs (i), (ii) or (iii) above,
in each case, whether any of the transactions specified in paragraphs (i), (ii) or (iii) above is to be
settled by delivery of H Shares or other equity securities of our Company, as applicable, in cash or
otherwise (whether or not the issue of such H Shares or other shares or securities of our Company
will be completed within the First Six-Month Period), provided that the foregoing restrictions shall
not apply to the issue of the Shares by our Company pursuant to the Global Offering. In the event
that, during the period of six months commencing on the date on which the First Six-Month Period
expires (the “ Second Six-Month Period ”), our Company enters into any of the transactions
specified in paragraphs (i), (ii) and (iii) above or offers to or agrees to or contracts to, or
announces, or publicly discloses, any intention to, enter into any such transactions, our Company
shall take all reasonable steps to ensure that we will not create a disorderly or false market in the
H Shares or other securities of our Company. Each of the Controlling Shareholders under the Hong
Kong Underwriting Agreement undertakes to each of the Sole Sponsor, the Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries to procure the Company to comply with the
undertakings in the paragraph above.
UNDERWRITING
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Undertakings by our Controlling Shareholders
Pursuant to the Hong Kong Underwriting Agreement, each of our Controlling Shareholders
has undertaken to each of our Company, the Sole Sponsor, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Hong Kong
Underwriters and the Capital Market Intermediaries that, without the prior written consent of the
Sole Sponsor and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters and the Capital Market Intermediaries) and unless in compliance with the Listing
Rules (including pursuant to Note (2) to Rule 10.07 of the Listing Rules):
(a) During the First Six-Month Period, each of our Controlling Shareholders will not:
(i) offer, pledge, charge, sell, offer to sell, contract or agree to sell, mortgage, charge,
pledge, hypothecate, lend, grant or sell any option, warrant, contract or right to
purchase, grant, or purchase any option, warrant, contract or right to sell, grant or
agree to grant any option, right or warrant to purchase or subscribe for, lend or
otherwise transfer or dispose of or create an Encumbrance over, or agree to transfer
or dispose of or create an Encumbrance over, either directly or indirectly,
conditionally or unconditionally, any H Shares or other equity securities of our
Company or any interest in any of the foregoing (including, but not limited to, any
securities that are convertible into or exchangeable or exercisable for, or that
represent the right to receive, or any warrants or other rights to purchase, any H
Shares or other securities of our Company, or deposit with a depositary in
connection with the issue of depositary receipts any Shares or other securities of
our Company beneficially owned by him as at the Listing Date (the “ Locked-up
Securities ”);
(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of, any Locked-up Securities;
(iii) enter into any transaction with the same economic effect as any transaction
specified in paragraphs (i) and (ii) above; or
(iv) offer to or contract to or announce, or agree to or publicly disclose that he/it will
or may enter into any transaction described in paragraphs (i), (ii) or (iii) above,
in each case, whether any such transaction described in paragraphs (i), (ii) or (iii) above is to
be settled by delivery of such H Shares or other securities of our Company, in cash or
otherwise (whether or not the settlement or delivery of such H Shares or other securities will
be completed within the First Six-Month Period); and
UNDERWRITING
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(b) in Second Six Month Period, each of our Controlling Shareholders will not and will
procure that the relevant registered holder(s) will not enter into any of the transactions
specified in the Hong Kong Underwriting Agreement or offer to or agree to do any of
the foregoing or announce any intention to do so if, immediately following such
transaction or action, will cease to be the controlling shareholder (as defined in the
Listing Rules) of our Company; and until the expiry of the Second Six-Month Period, in
the event that into any such transactions described in paragraphs (i), (ii) or (iii) above or
offers to or agrees to or announce any intention to effect any such transaction, will take
all reasonable steps to ensure that they will not create a disorderly or false market in the
Shares or other securities of our Company.
INTERNATIONAL OFFERING
International Underwriting Agreement
In connection with the International Offering, it is expected that our Company will enter into
the International Underwriting Agreement with the Sole Sponsor, the Overall Coordinators and the
International Underwriters. Under the International Underwriting Agreement, the International
Underwriters will, subject to certain conditions set out therein, severally and not jointly, agree to
procure subscribers or purchasers for, or to purchase, their respective proportions of the
International Offer Shares being offered under the International Offering (subject to, among other,
any reallocation between the International Offering and the Hong Kong Public Offering).
It is expected that the International Underwriting Agreement may be terminated on similar
grounds as those in the Hong Kong Underwriting Agreement. Potential investors should note that
if the International Underwriting Agreement is not entered into, or is terminated, the Global
Offering will not proceed.
Our Company has agreed to indemnify the International Underwriters against certain
liabilities, including liabilities under the U.S. Securities Act.
OFFER SIZE ADJUSTMENT OPTION
Our Company has an Offer Size Adjustment Option which will allow the Company to, upon
signing of the Hong Kong Underwriting Agreement, issue up to an aggregate of 5,250,000
additional Offer Shares, representing approximately 15.0% of the Offer Shares initially offered
under the Global Offering at the Offer Price to cover excess demand. The Offer Size Adjustment
Option provides flexibility for the Company to increase the number of Offer Shares available for
purchase to cover additional market demand. Further details are set out in the section headed
“Structure of the Global Offering — Offer Size Adjustment Option” in this prospectus.
UNDERWRITING
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UNDERWRITING COMMISSIONS AND LISTING EXPENSES
The Underwriters and the Capital Market Intermediaries will receive an underwriting
commission equal to 2.65% of the aggregate Offer Price payable for the Offer Shares, out of which
they will pay any sub-underwriting commissions and other fees (the “ Fixed Fees ”). Our Company
may, at our sole and absolute discretion, pay to one or more Underwriters or Capital Market
Intermediaries an additional incentive fee up to 1% of the Offer Price payable for the Offer Shares
(the “ Discretionary Fees ”). The ratio of the Fixed Fees and the Discretionary Fees (if fully paid)
payable to all Underwriters and Capital Market Intermediaries is therefore approximately 54.5%:
45.5%. For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering,
the underwriting commission will not be paid to the Hong Kong Underwriters but will instead be
paid, at the rate applicable to the International Offering, to the relevant International Underwriters.
The aggregate underwriting commissions and fees (including the incentive fees and assuming
full payment), together with the Stock Exchange listing fees, the SFC transaction levy, AFRC
transaction levy, the Stock Exchange trading fee, legal and other professional fees, printing and
other expenses relating to the Global Offering, are estimated to be approximately HK$34.87
million (assuming an Offer Price of HK$28.86 per Offer Share, the full payment of the
discretionary incentive fee) in aggregate, and are to be borne by us.
ACTIVITIES BY SYNDICATE MEMBERS
We describe below a variety of activities that each of the Underwriters and the Capital
Market Intermediaries of the Hong Kong Public Offering and the International Offering (together,
the “ Syndicate Members ”) and their affiliates, may individually undertake, and which do not form
part of the underwriting process. When engaging in any of these activities, it should be noted that
the Syndicate Members are subject to restrictions, including the following:
(a) under the agreement among the Syndicate Members, all of them must not make bids or
purchases or effect any other transactions (including but not limited to issuing any
option or derivative or structured product which has, as its underlying asset, any Offer
Shares), whether in the open market or otherwise, for the purpose of or with a view to
creating actual, or apparent, active trading in the Offer Shares or raising, stabilizing or
maintaining the price of the Offer Shares to or at levels other than those which might
otherwise prevail in the open market; and
(b) all of them must comply with all applicable laws and regulations, including the market
misconduct provisions of the SFO, including the provisions prohibiting insider dealing,
false trading, price rigging and stock market manipulation.
UNDERWRITING
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The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of commercial
and investment banking, brokerage, funds management, trading, hedging, investing and other
activities for their own account and for the accounts of others. In relation to the H Shares, those
activities could include acting as agent for buyers and sellers of the H Shares, entering into over
the counter or listed derivative transactions or listed or unlisted securities transactions (including
issuing securities such as derivative warrants listed on a stock exchange) which have the H Shares
as their or part of their underlying assets. Those activities may require hedging activity by those
entities involving, directly or indirectly, buying and selling the H Shares. All such activity could
occur in Hong Kong and elsewhere in the world and may result in the Syndicate Members and
their affiliates holding long and/or short positions in the H Shares, in baskets of securities or
indices including the H Shares, in units of funds that may purchase the H Shares, or in derivatives
related to any of the foregoing.
In relation to issues by the Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any other
stock exchange, the rules of the exchange may require the issuer of those securities (or one of its
affiliates or agents) to act as a market maker or liquidity provider in the security, and this will also
result in hedging activity in the H Shares in most cases.
These activities may affect the market price or value of the H Shares, the liquidity or trading
volume in the H Shares, and the volatility of the H Shares’ share price, and the extent to which
this occurs from day to day cannot be estimated.
UNDERWRITERS’ AND CAPITAL MARKET INTERMEDIARIES’ INTEREST IN OUR
GROUP
Except as disclosed in this prospectus and the obligations under the Hong Kong Underwriting
Agreement and the International Underwriting Agreement, none of the Underwriters and the
Capital Market Intermediaries has any shareholding interest in any member of our Group or any
right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for
securities in any member of our Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
SOLE SPONSOR’S INDEPENDENCE
The Sole Sponsor satisfies the independence criteria applicable to sponsor as set out in Rule
3A.07 of the Listing Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part of the
Global Offering. The Global Offering comprises:
(i) the Hong Kong Public Offering of initially 3,500,000 Offer Shares (subject to
reallocation and the Offer Size Adjustment Option as mentioned below) in Hong Kong
as described in “The Hong Kong Public Offering” below in this section; and
(ii) the International Offering of initially 31,500,000 Offer Shares (subject to reallocation
and the Offer Size Adjustment Option) outside the United States in offshore transactions
in reliance on Regulation S and the applicable laws of the jurisdiction where those
offers and sales occur, as described in “The International Offering” below in this
section.
Investors may either apply for the Hong Kong Offer Shares under the Hong Kong Public
Offering, or apply for or indicate an interest for the International Offer Shares under the
International Offering, but may not do both.
The 35,000,000 Offer Shares in the Global Offering will represent approximately 11.79% of
our enlarged share capital immediately after the completion of the Global Offering (assuming the
Offer Size Adjustment Option is not exercised). The underwriting arrangements, and the respective
Underwriting Agreements, are summarized in the section headed “Underwriting” in this
prospectus. If the Offer Size Adjustment Option is exercised in full, the 40,250,000 Offer Shares
will represent approximately 13.33% of our enlarged share capital immediately after the
completion of the Global Offering.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering may be subject to reallocation as described in “The Hong Kong Public
Offering — Reallocation” below in this section.
References in this prospectus to applications, application or subscription monies or procedure
for applications relate solely to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Our Company is initially offering 3,500,000 Offer Shares for subscription by the public in
Hong Kong at the Offer Price, representing approximately 10% of the total number of Offer Shares
initially available under the Global Offering. The Hong Kong Offer Shares will represent
approximately 1.18% of our Company’s enlarged share capital immediately after completion of the
Global Offering (subject to the reallocation of Offer Shares between the International Offering and
the Hong Kong Public Offering and assuming the Offer Size Adjustment Option is not exercised).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to
institutional and professional investors. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and other
securities and corporate entities which regularly invest in shares and other securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set out in
“Conditions of the Global Offering” below in this section.
Allocation
Allocation of the Hong Kong Offer Shares to applicants under the Hong Kong Public
Offering will be based on the level of valid applications received under the Hong Kong Public
Offering. The basis of allocation may vary depending on the number of Hong Kong Offer Shares
validly applied for by applicants. We may, if necessary, allocate the Hong Kong Offer Shares on
the basis of balloting, which would mean that some applicants may receive a higher allocation than
others who have applied for the same number of Hong Kong Offer Shares and those applicants
who are not successful in the ballot may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of the Hong Kong Offer Shares available under
the Hong Kong Public Offering (after taking account of any reallocation referred to below) is to be
divided equally into two pools (subject to reallocation at odd lot size): pool A and pool B, both of
which are available on an equitable basis to successful applicants with any odd board lots being
allocated to pool A:
STRUCTURE OF THE GLOBAL OFFERING
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Pool A: ...................... the Offer Shares will be allocated on an equitable
basis to applicants who have applied for the Hong
Kong Offer Shares with an aggregate subscription
price of HK$5 million (excluding the brokerage, the
SFC transaction levy, AFRC transaction levy and the
Stock Exchange trading fee payable) or less; and
Pool B: ...................... the Offer Shares will be allocated on an equitable
basis to applicants who have applied for the Hong
Kong Offer Shares with an aggregate subscription
price of more than HK$5 million (excluding the
brokerage, the SFC transaction levy, AFRC transaction
levy and the Stock Exchange trading fee payable) and
up to the total value of pool B.
Applicants should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the
pools are under-subscribed, the surplus Hong Kong Offer Shares will be transferred to the other
pool to satisfy demand in the pool and be allocated accordingly.
For the purpose of this subsection only, the “subscription price” for the Offer Shares means
the price payable on application therefor (without regard to the Offer Price as finally determined).
Applicants can only receive an allocation of Hong Kong Offer Shares from either pool A or pool B
but not from both pools. Multiple or suspected multiple applications under the Hong Kong Public
Offering and any application for more than 1,750,000 Hong Kong Offer Shares (being
approximately 50% of the Hong Kong Offer Shares initially available under the Hong Kong Public
Offering (assuming the Offer Size Adjustment Option is not exercised)) will be rejected.
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the discretion
of the Overall Coordinators. Subject to the allocation cap described in the subsequent paragraph,
the Overall Coordinators may in their discretion reallocate Offer Shares from the International
Offering to the Hong Kong Public Offering to satisfy valid applications under the Hong Kong
Public Offering. In addition, if the Hong Kong Public Offering is not fully subscribed, the Overall
Coordinators will have the discretion (but shall not be under any obligation) to reallocate to the
International Offering all or any unsubscribed Hong Kong Offer Shares in such amounts as they
deem appropriate.
STRUCTURE OF THE GLOBAL OFFERING
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In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering will
be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Overall Coordinators
deem appropriate. In the event of reallocation of Offer Shares between the International Offering
and the Hong Kong Public Offering in the circumstances where (a) the International Offer Shares
are fully subscribed or oversubscribed and the Hong Kong Offer Shares are fully subscribed or
oversubscribed irrespective of the number of times; or (b) the International Offer Shares are
undersubscribed and the Hong Kong Offer Shares are fully subscribed or oversubscribed
irrespective of the number of times, then up to 1,750,000 Offer Shares may be reallocated from the
International Offering to the Hong Kong Public Offering, so that the total number of Offer Shares
available for subscription under the Hong Kong Public Offering will increase up to 5,250,000
Offer Shares, representing approximately 15% of the number of Offer Shares initially available
under the Global Offering (before any exercise of the Offer Size Adjustment Option) in accordance
with Chapter 4.14 of the Guide for New Listing Applicants. In the circumstance where the
International Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer Shares
are undersubscribed, there will be no reallocation from the International Offering to the Hong
Kong Public Offering, and no over-allocation of H Shares to the Hong Kong Public Offering.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide for New Listing Applicants and the provision of Paragraph 4.2(b) of Practice Note 18 of the
Listing Rules, no mandatory clawback or reallocation mechanism is required to increase the
number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the total
number of Offer Shares offered under the Global Offering.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and the
International Offering will be disclosed in the results announcement of the Global Offering, which
is expected to be published on Monday, March 9, 2026.
Where the International Offer Shares are undersubscribed, if the Hong Kong Offer Shares are
also undersubscribed, the Global Offering will not proceed unless the Underwriters would
subscribe or procure subscribers for their respective applicable proportions of the Offer Shares
being offered which are not taken up under the Global Offering on the terms and conditions of this
prospectus and the Underwriting Agreements.
Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by the applicant that he/she/it and any
person(s) for whose benefit the applicant is making the application have not applied for or taken
STRUCTURE OF THE GLOBAL OFFERING
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--- page 415 ---
up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
Offer Shares under the International Offering, and such applicant’s application under the
International Offering is liable to be rejected if the said undertaking and/or confirmation is
breached and/or untrue (as the case may be).
The listing of the Offer Shares on the Stock Exchange is sponsored by the Sole Sponsor.
Applicants under the Hong Kong Public Offering are required to pay, on application (subject to
application channel), the maximum Offer Price of HK$28.86 per H Share in addition to any
brokerage, SFC transaction levy, AFRC transaction levy and the Stock Exchange trading fee
payable on each Offer Share, amounting to a total of HK$2,915.10 for one board lot of 100 H
Shares. If the Offer Price, as finally determined in the manner described in the sub-section headed
“Pricing and Allocation” in this section below, is less than the maximum Offer Price of HK$28.86
per Offer Share, appropriate refund payments (including the brokerage, the SFC transaction levy,
AFRC transaction levy and the Stock Exchange trading fee attributable to the surplus application
monies) will be made to successful applicants (subject to application channels), without interest.
Further details are set out below in the section headed “How to Apply for Hong Kong Offer
Shares” in this prospectus.
THE INTERNATIONAL OFFERING
Number of Offer Shares Offered
Subject to the reallocation as described above, our Company will be initially offering for
subscription under the International Offering 31,500,000 Offer Shares (subject to reallocation and
the Offer Size Adjustment Option), representing approximately 90% of the Offer Shares initially
available under the Global Offering and approximately 10.61% of our enlarged issued share capital
immediately after completion of the Global Offering (assuming the Offer Size Adjustment Option
is not exercised).
Allocation
The International Offering will include selective marketing of the International Offer Shares
institutional and professional investors and other investors anticipated to have a sizeable demand
for such International Offer Shares in other jurisdictions outside the United States in reliance on
Regulation S. Professional investors generally include brokers, dealers, companies (including fund
managers) whose ordinary business involves dealing in shares and other securities and corporate
entities which regularly invest in shares and other securities. Prospective professional, institutional
and other investors will be required to specify the number of International Offer Shares under the
STRUCTURE OF THE GLOBAL OFFERING
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--- page 416 ---
International Offering they would be prepared to acquire. This process, known as “book-building”,
is expected to continue up to, and to cease on or around, the last day for lodging applications
under the Hong Kong Public Offering.
Allocation of International Offer Shares pursuant to the International Offering will be
determined by the Overall Coordinators (for themselves and on behalf of the Underwriters) and
will be based on a number of factors, including the level and timing of demand, the total size of
the relevant investor’s invested assets or equity assets in the relevant sector and whether or not it
is expected that the relevant investor is likely to buy further Offer Shares, and/or hold or sell its
Offer Shares, after the listing of the Offer Shares on the Stock Exchange. Such allocation is
intended to result in a distribution of the Offer Shares on a basis which would lead to the
establishment of a solid professional and institutional shareholder base to the benefit of our
Company and our Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require any
investor who has been offered the International Offer Shares under the International Offering and
who has made an application under the Hong Kong Public Offering to provide sufficient
information to the Overall Coordinators so as to allow it to identify the relevant application under
the Hong Kong Public Offering and to ensure that they are excluded from any application of the
Hong Kong Offer Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of the exercise of the Offer Size Adjustment Option described in the paragraph
headed “— Offer Size Adjustment Option” in this section, and any reallocation of unsubscribed
Offer Shares originally included in the Hong Kong Public Offering and/or any Offer Shares from
the International Offering to the Hong Kong Public Offering at the discretion of the Overall
Coordinators.
PRICING AND ALLOCATION
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be fixed on the Price Determination Date, which is expected to be on or before
Friday, March 6, 2026, by agreement between the Overall Coordinators and our Company, and the
number of Offer Shares to be allocated under the various offerings will be determined shortly
thereafter.
STRUCTURE OF THE GLOBAL OFFERING
– 405 –


--- page 417 ---
The Offer Price will not be more than HK$28.86 per Offer Share, unless otherwise
announced, as further explained below. If you apply for the Offer Shares under the Hong Kong
Public Offering, you must pay the maximum Offer Price of HK$28.86 per Offer Share, on
application (subject to application channel), plus 1.0% brokerage, 0.0027% SFC transaction levy,
0.00015% AFRC transaction levy and 0.00565% Stock Exchange trading fee, amounting to a total
of HK$2,915.10 for one board lot of 100 H Shares.
Determining the Offer Price
The International Underwriters are soliciting from prospective investors indications of
interest in acquiring our H Shares in the International Offering. Prospective investors will be
required to specify the number of International Offer Shares under the International Offering they
would be prepared to acquire either at different prices or at a particular price. This process, known
as “book-building”, is expected to continue up to, but to cease on or around, the Price
Determination Date.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators (on
behalf of the Underwriters) and us, on the Price Determination Date, when market demand for the
Offer Shares will be determined. The Price Determination Date is expected to be on or before
Friday, March 6, 2026 (Hong Kong time) and, in any event, not later than 12:00 noon on Friday,
March 6, 2026 (Hong Kong time).
We will determine the Offer Price by reference to, among other factors, the closing price of
the A Shares on the Shenzhen Stock Exchange on the last trading day on or before the Price
Determination Date (which is accessible to the Shareholders and potential investors at
https://www.szse.cn/English/siteMarketData/siteMarketDatas/lookup/index.html?code=300450
),
and the Offer Price will not be more than HK$28.86. The historical prices of our A Shares and
trading volume on Shenzhen Stock Exchange are set out below.
Period High Low ADTV (1)
(RMB) (RMB) (A Shares)
Year ended December 31, 2022 .......... 48.39 25.32 2,621,004.96
Year ended December 31, 2023 .......... 39.44 24.60 4,708,166.94
Year ended December 31, 2024 .......... 31.98 15.95 5,553,000.41
Year ended December 31, 2025 .......... 73.00 26.20 12,356,420.99
Year of 2026 up to Latest Practicable Date . 53.96 44.01 9,548,990.63
Note:
(1) Average daily trading volume (“ ADTV”) represents daily average number of our A Shares traded over the relevant
period.
STRUCTURE OF THE GLOBAL OFFERING
– 406 –


--- page 418 ---
The final Offer Price, the level of indications of interest in the International Offering, the
level of applications in the Hong Kong Public Offering, the basis of allocations of the Hong Kong
Offer Shares and the results of allocations in the Hong Kong Public Offering are expected to be
made available through a variety of channels in the manner described in “How to Apply for Hong
Kong Offer Shares — Publication of Results”.
Reduction in Number of Offer Shares and/or Offer Price
The Overall Coordinators (on behalf of the Underwriters) may, based on the level of interest
expressed by prospective investors during the book-building process in respect of the International
Offering, and with our consent, reduce the number of Offer Shares below that stated in this
prospectus at any time on or before the morning of the last day for making applications under the
Hong Kong Public Offering. In this case, we will as soon as practicable after the decision to make
the reduction (and no later than the morning of the last day for making applications under the
Hong Kong Public Offering) publish on the website of the Hong Kong Stock Exchange at
www.hkexnews.hk
and our website at www.meigsmart.com notice of the reduction, the
cancellation of the Global Offering and the relaunch of the Global Offering at the revised number
of Offer Shares and/or the revised Offer Price. This notice will also include confirmation or
revision, as appropriate, of the working capital statement and the Global Offering statistics as set
out in this prospectus, as well as any other financial information which may change as a result of
the reduction.
We will, as soon as practicable following the decision to make the reduction, in addition to
publishing the notice, issue a supplemental prospectus containing details in relation to the change
in the number of Offer Shares being offered. The Global Offering will be cancelled and
subsequently relaunched on FINI pursuant to the supplemental prospectus.
Before making applications for the Hong Kong Offer Shares, applicants should have regard to
the possibility that any announcement of a reduction in the number of Offer Shares may not be
made until the day which is the last day for making applications under the Hong Kong Public
Offering.
In the absence of a notice of reduction, the number of Offer Shares (if the Company agrees
with the Overall Coordinators (on behalf of the Underwriters)), will not be reduced.
STRUCTURE OF THE GLOBAL OFFERING
– 407 –


--- page 419 ---
Announcement of the Offer Price and Basis of Allocations
The Offer Price, level of applications in the Hong Kong Public Offering, level of indications
of interest in the International Offering, and basis of allocations of the Hong Kong Offer Shares
are expected to be made available through a variety of channels in the manner described in the
subsection headed “How to Apply for the Hong Kong Offer Shares — Publication of Results”.
OFFER SIZE ADJUSTMENT OPTION
In order to provide flexibility for the Company to increase the number of Offer Shares
available for purchase to cover additional market demand, the Company has an Offer Size
Adjustment Option which will allow the Company to, upon signing of the Hong Kong
Underwriting Agreement, issue up to an aggregate of 5,250,000 additional Offer Shares
(representing approximately 15% of the Offer Shares initially offered under the Global Offering) at
the Offer Price to cover excess demand.
If the Offer Size Adjustment Option is exercised in full, the additional Offer Shares to be
issued pursuant thereto will represent approximately 1.74% of our issued share capital immediately
following the completion of the Global Offering.
In considering whether to exercise the Offer Size Adjustment Option, the Company and the
Overall Coordinators will take into account a number of factors, including, among other things:
(1) whether the level of interest expressed by prospective professional and institutional
investors during the book-building process under the International Offering is sufficient
to cover the total number of Offer Shares, which represents the aggregate of the Offer
Shares initially available under the Global Offering and the additional Offer Shares upon
any exercise of the Offer Size Adjustment Option; and
(2) the prices at which prospective professional and institutional investors have indicated
they would be prepared to acquire the Offer Shares in the course of the book-building
process;
(3) the quality of investors, with a view to establishing a solid professional institutional and
investor shareholder base to the benefit of the Company and its Shareholders as a
whole; and
(4) general market conditions.
STRUCTURE OF THE GLOBAL OFFERING
– 408 –


--- page 420 ---
The dilution effect of the Offer Size Adjustment Option is set out below:
Number of H Shares
issued under the Global
Offering before the
exercise of the Offer Size
Adjustment Option (the
“Original Subscribers”)
Approximate percentage
of total issued share
capital held by the
Original Subscribers
before the exercise of the
Offer Size Adjustment
Option
Number of H Shares
issued under the Global
Offering after the exercise
of the Offer Size
Adjustment Option in full
Approximate percentage
of total issued share
capital held by the
Original Subscribers after
the exercise of the Offer
Size Adjustment Option in
full
35,000,000 11.79% 40,250,000 13.33%
The Offer Size Adjustment Option will not be used for price stabilization purposes and will
not be subject to the provisions of the Securities and Futures (Price Stabilizing) Rules (Chapter
571W of the Laws of Hong Kong).
The Company will disclose in its allotment results announcement if and to what extent the
Offer Size Adjustment Option has been exercised, or will confirm in the announcement that, if the
Offer Size Adjustment Option has not been exercised by then, the Offer Size Adjustment Option
has lapsed and cannot be exercised on any future date.
The International Underwriter will be soliciting from prospective investors indications of
interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire at the Offer Price. This process, known as
“book-building”, is expected to continue up to, and to cease on or around, the last day for lodging
applications under the Hong Kong Public Offering.
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters)
may, where considered appropriate, based on the level of interest expressed by prospective
investors during the book-building process, and with the prior consent of our Company, reduce the
number of Offer Shares and/or the Offer Price below that stated in this prospectus prior to the
morning of the last day for lodging applications under the Hong Kong Public Offering. In such a
situation, our Company will, as soon as practicable following the decision to make such reduction
and in any event not later than the morning of the last day for lodging applications under the Hong
Kong Public Offering, post a notice on the website of the Stock Exchange ( www.hkexnews.hk
)
and the website of our Company ( www.meigsmart.com ) (the contents of the website do not form a
part of this prospectus). Our Company will also, as soon as practicable following the decision to
make such change, issue a supplemental prospectus updating investors of the change in the number
of Offer Shares being offered under the Global Offering and/or the Offer Price. The Global
Offering must first be canceled and subsequently relaunched on FINI pursuant to the supplemental
prospectus.
STRUCTURE OF THE GLOBAL OFFERING
– 409 –


--- page 421 ---
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any notice of a reduction in the number of Offer Shares and/or the
Offer Price may not be made until the last day for lodging applications under the Hong Kong
Public Offering. In the absence of any such notice so published, the number of Offer Shares will
not be reduced and/or the Offer Price, if agreed upon with our Company and the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) will under no
circumstances be set outside the Offer Price stated in this prospectus. However, if the number of
Offer Shares and/or the Offer Price is reduced, the Company will issue a supplemental prospectus
updating investors of the change in the number of Offer Shares being offered under the Global
Offering and/or the Offer Price. The Global Offering must first be canceled and subsequently
relaunched on FINI pursuant to the supplemental prospectus.
The final Offer Price, the indication of the level of interest in the International Offering, the
basis of allotment of the Offer Shares available under the Hong Kong Public Offering and the
results of allocations in the Hong Kong Public Offering are expected to be made available in a
variety of channels in the manner described in the section headed “How to Apply for Hong Kong
Offer Shares — D. Despatch/Collection of Share Certificates and Refund of Application Monies”
in this prospectus.
UNDERWRITING AGREEMENT
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters under
the terms of the Hong Kong Underwriting Agreement and is conditional upon the International
Underwriting Agreement being signed and becoming unconditional.
We expect to enter into the International Underwriting Agreement relating to the International
Offering on or around the Price Determination Date. The underwriting arrangements under the
Hong Kong Underwriting Agreement and the International Underwriting Agreement are
summarized in the section headed “Underwriting” in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Hong Kong Offer Shares is conditional on, among others:
(a) the Listing Committee granting approval for the listing of, and permission to deal in, the
H Shares in issue and to be issued pursuant to the Global Offering on the Main Board of
the Stock Exchange and such approval not subsequently having been withdrawn or
revoked prior to the Listing Date;
(b) the Offer Price having been agreed between the Overall Coordinators and our Company;
STRUCTURE OF THE GLOBAL OFFERING
– 410 –


--- page 422 ---
(c) the execution and delivery of the International Underwriting Agreement on or around
the Price Determination Date; and
(d) the obligations of the Hong Kong Underwriters and the Capital Market Intermediaries
under the Hong Kong Underwriting Agreement and the obligations of the International
Underwriters and the Capital Market Intermediaries under the International
Underwriting Agreement becoming unconditional and not having been terminated in
accordance with the terms of the respective agreements,
in each case on or before the dates and times specified in the Hong Kong Underwriting Agreement
and/or the International Underwriting Agreement, as the case may be (unless and to the extent such
conditions are validly waived on or before such dates and times) and in any event not later than 30
days after the date of this prospectus.
If, for any reason, the Offer Price is not agreed between the Overall Coordinators and our
Company on or before 12:00 noon on Friday, March 6, 2026, the Global Offering will not proceed
and will lapse.
The consummation of each of the Hong Kong Public Offering and the International Offering
is conditional upon, among other things, the other offering becoming unconditional and not having
been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the times and dates specified, the
Global Offering will lapse, and the Stock Exchange will be notified immediately. Notice of the
lapse of the Hong Kong Public Offering will be published by our Company on the website of the
Stock Exchange ( www.hkexnews.hk
) and on the website of our Company ( www.meigsmart.com )
on the next day following such lapse. In such a situation, all application monies will be returned,
without interest, on the terms set forth in the section headed “How to Apply for Hong Kong Offer
Shares — D. Despatch/Collection of Share Certificates and Refund of Application Monies” in this
prospectus. In the meantime, all application monies will be held in separate bank account(s) with
the receiving banks or other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter
155 of the Laws of Hong Kong).
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the listing of, and
permission to deal in, the H Shares in issue and to be issued by us pursuant to the Global Offering
(including additional H Shares which may be issued pursuant to the exercise of the Offer Size
Adjustment Option).
STRUCTURE OF THE GLOBAL OFFERING
–4 1 1–


--- page 423 ---
Except that we have applied for the Listing on the Stock Exchange, no part of our Company’s
share or loan capital is listed on or dealt in on any other stock exchange and no such listing or
permission to deal is being or proposed to be sought in the near future.
H SHARES WILL BE ELIGIBLE FOR CCASS
All necessary arrangements have been made to enable the H Shares to be admitted into
CCASS. If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and
our Company complies with the stock admission requirements of HKSCC, the H Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with
effect from the date of commencement of dealings in the H Shares on the Stock Exchange or any
other date HKSCC chooses. Settlement of transactions between participants of the Stock Exchange
is required to take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m.
in Hong Kong on Tuesday, March 10, 2026, it is expected that dealings in our H Shares on the
Stock Exchange will commence at 9:00 a.m. on Tuesday, March 10, 2026.
Our H Shares will be traded in board lots of 100 H Shares each and the stock code of the H
Shares is 3268.
STRUCTURE OF THE GLOBAL OFFERING
– 412 –


--- page 424 ---
IMPORTANT NOTICE TO INVESTORS OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong Public Offering
and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk
under the “HKEXnews > New Listings > New Listing Information” section, and our website at
www.meigsmart.com .
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up
and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you are
applying for:
 are 18 years of age or older; and
 have a Hong Kong address (for the White Form eIPO service only).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the person(s)
for whose benefit you are applying for:
 are an existing Shareholder or close associates; or
 are a Director or any of his/her close associates.
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 am on Friday, February 27,
2026 and end at 12:00 noon on Thursday, March 5, 2026 (Hong Kong time).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 413 –


--- page 425 ---
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application
Channel Platform Target Investors Application Time
White Form
eIPO service
www.eipo.com.hk Applicants who would
like to receive a
physical Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in your
own name.
From 9:00 a.m. on
Friday, February 27,
2026 to 11:30 a.m. on
Thursday, March 5,
2026, Hong Kong
time. The latest time
for completing full
payment of
application monies
will be 12:00 noon on
Thursday, March 5,
2026, Hong Kong
time.
HKSCC EIPO
channel
Your broker or
custodian who is a
HKSCC Participant
will submit electronic
application
instructions on your
behalf through
HKSCC’s FINI
system in accordance
with your instruction.
Applicants who would
not like to receive a
physical Share
certificate. Hong
Kong Offer Shares
successfully applied
for will be allotted
and issued in the
name of HKSCC
Nominees, deposited
directly into CCASS
and credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker or
custodian for the
earliest and latest
time for giving such
instructions, as this
may vary by broker
or custodian.
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the
last day of the application period to apply for Hong Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 414 –


--- page 426 ---
For those applying through the White Form eIPO service, once you complete payment in
respect of any application instructions given by you or for your benefit through the White Form
eIPO service to make an application for Hong Kong Offer Shares, an actual application shall be
deemed to have been made. If you are a person for whose benefit the electronic application
instructions are given, you shall be deemed to have declared that only one set of electronic
application instructions has been given for your benefit. If you are an agent for another person,
you shall be deemed to have declared that you have only given one set of electronic application
instructions for the benefit of the person for whom you are an agent and that you are duly
authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the White Form eIPO
service more than once and obtaining different application reference numbers without effecting full
payment in respect of a particular reference number will not constitute an actual application.
If you apply through the White Form eIPO service, you are deemed to have authorized the
White Form eIPO Service Provider to apply on the terms and conditions in this prospectus, as
supplemented and amended by the terms and conditions of the White Form eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong Offer
Shares on your behalf and to do on your behalf all the things stated in this prospectus and any
supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed to
have been made for any application instructions given by you or for your benefit to HKSCC (in
which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time of
the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor HKSCC
Nominees shall be liable to you or any other person in respect of any actions taken by HKSCC or
HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any breach of the
terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 415 –


--- page 427 ---
3. Information Required to Apply
You must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your identity
document
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country or
jurisdiction
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order of
priority:
 Identity document type, with order
of priority:
i. HKID card; or
ii. National identification document; or
iii. Passport; and
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document;
and
 Identity document number  Identity document number
Notes:
(1) If you are applying through the White Form eIPO service, you are required to provide a valid e-mail address,
a contact telephone number and a Hong Kong address. You are also required to declare that the identity
information provided by you follows the requirements as described in Note 2 below. In particular, where you
cannot provide a HKID number, you must confirm that you do not hold a HKID card.
(2) The applicant’s full name as shown on their identity document must be used and the surname, given name,
middle and other names (if any) must be input in the same order as shown on the identity document. If an
applicant’s identity document contains both an English and Chinese name, both English and Chinese names
must be used. Otherwise, either English or Chinese names will be accepted. The order of priority of the
applicant’s identity document type must be strictly followed and where an individual applicant has a valid
HKID card (including both Hong Kong Residents and Hong Kong Permanent Residents), the HKID number
must be used when making an application to subscribe for Hong Kong Offer Shares. Similarly for corporate
applicants, a LEI number must be used if an entity has a LEI certificate.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 416 –


--- page 428 ---
(3) If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will be
required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID of the
asset management company or the individual fund, as appropriate, which has opened a trading account with
the broker will be required, as above.
(4) The maximum number of joint applicants on FINI is capped at 4 in accordance with market practice.
(5) If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity document),
the identity document’s issuing country or jurisdiction, the identity document type; and (ii), the identity
document number, for each of the beneficial owners or, in the case(s) of joint beneficial owners, for each
joint beneficial owner. If you do not include this information, the application will be treated as being made
for your benefit.
(6) If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated as
being for your benefit and you should provide the required information in your application as stated above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any other
stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or capital).
For those applying through HKSCC EIPO channel, and making an application under a power
of attorney, we and the Overall Coordinators, as our agent, have discretion to consider whether to
accept it on any conditions we think fit, including evidence of the attorney’s authority.
Failing to provide any required information may result in your application being rejected.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 417 –


--- page 429 ---
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size ........... : 100 H Shares
Permitted number of
Hong Kong Offer
Shares for application
and amount payable on
application/successful
allotment .............
: Hong Kong Offer Shares are available for application in
specified board lot sizes only. Please refer to the
amount payable associated with each specified board
lot size in the table below.
The maximum Offer Price is HK$28.86 per H Share. If
you are applying through the HKSCC EIPO channel,
your broker or custodian may require you to pre-fund
your application in such amount as determined by the
broker or custodian, based on the applicable laws and
regulations in Hong Kong. You are responsible for
complying with any such pre-funding requirement
imposed by your broker or custodian with respect to
the Hong Kong Offer Shares you applied for.
By instructing your broker or custodian to apply for the
Hong Kong Offer Shares on your behalf through the
HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of
the Offer Price, brokerage, SFC transaction levy, the
Stock Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank account at
the Designated Bank for your broker or custodian.
If you are applying through the White Form eIPO
service, you may refer to the table below for the
amount payable for the number of Shares you have
selected. You must pay the respective maximum
amount payable on application in full upon application
for Hong Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 418 –


--- page 430 ---
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
HK$ HK$ HK$ HK$
100 2,915.10 2,000 58,302.11 10,000 291,510.53 300,000 8,745,315.94
200 5,830.22 2,500 72,877.64 20,000 583,021.06 400,000 11,660,421.25
300 8,745.31 3,000 87,453.16 30,000 874,531.60 500,000 14,575,526.56
400 11,660.42 3,500 102,028.69 40,000 1,166,042.12 600,000 17,490,631.85
500 14,575.53 4,000 116,604.21 50,000 1,457,552.65 700,000 20,405,737.16
600 17,490.64 4,500 131,179.74 60,000 1,749,063.19 800,000 23,320,842.48
700 20,405.74 5,000 145,755.27 70,000 2,040,573.72 900,000 26,235,947.79
800 23,320.83 6,000 174,906.32 80,000 2,332,084.25 1,000,000 29,151,053.10
900 26,235.95 7,000 204,057.36 90,000 2,623,594.78 1,250,000 36,438,816.38
1,000 29,151.05 8,000 233,208.42 100,000 2,915,105.31 1,500,000 43,726,579.66
1,500 43,726.58 9,000 262,359.48 200,000 5,830,210.62 1,750,000
(1) 51,014,342.93
Notes:
(1) Maximum number of Hong Kong Offer Share you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as defined
in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC transaction levy are
paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock Exchange on behalf of
the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange on behalf of the AFRC).
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own benefit,
except where you are a nominee and provide the information of the underlying investor in your
application as required under the paragraph headed “A. Application for Hong Kong Offer Shares
— 3. Information Required to Apply” in this section. If you are suspected of submitting or cause
to submit more than one application, all of your applications will be rejected.
Multiple applications made either through (i) the White Form eIPO service; (ii) HKSCC
EIPO channel; or (iii) both channels concurrently are prohibited and will be rejected. If you have
made an application through the White Form eIPO service or HKSCC EIPO channel, you or the
person(s) for whose benefit you have made the application shall not apply for any International
Offer Shares.
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6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or HKSCC
EIPO channel, you (or as the case may be, HKSCC Nominees will do the following things on
your behalf):
(i) undertake to execute all relevant documents and instruct and authorise us and/or the
Overall Coordinators, as our agent, to execute any documents for you and to do on your
behalf all things necessary to register any Hong Kong Offer Shares allocated to you in
your name or in the name of HKSCC Nominees as required by the Articles of
Association, and (if you are applying through the HKSCC EIPO channel) to deposit the
allotted Hong Kong Offer Shares directly into CCASS for the credit of your designated
HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your broker or
custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong Offer
Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out in this
prospectus and they do not apply to you, or the person(s) for whose benefit you have
made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
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(vi) agree that the Relevant Persons 1, the H Share Registrar and HKSCC will not be liable
for any information and representations not in this prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit you
have made the application to us, the Relevant Persons, the H Share Registrar, HKSCC,
HKSCC Nominees, the Stock Exchange, the SFC and any other statutory regulatory or
governmental bodies or otherwise as required by laws, rules or regulations, for the
purposes under the paragraph headed “G. Personal Data — Purposes” and “G. Personal
Data — 4. Transfer of personal data” in this section;
(viii) agree (without prejudice to any other rights which you may have once your application
(or as the case may be, HKSCC Nominees’ application) has been accepted) that you will
not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, any application made by you or HKSCC Nominees on your
behalf cannot be revoked once it is accepted, which will be evidenced by the
notification of the result of the ballot by the H Share Registrar by way of publication of
the results at the time and in the manner as specified in the paragraph headed “B.
Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “C.
Circumstances In Which You Will Not Be Allocated Hong Kong Offer Shares” in this
section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it and
the resulting contract will be governed by and construed in accordance with the laws of
Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any place
outside Hong Kong that apply to your application and that neither we nor the Relevant
1 Relevant Persons would include the Sole Sponsor, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Underwriters, the Capital Market Intermediates and any of their or
the Company’s respective directors, officers, employees, partners, agents or representatives and any other parties
involved in the Global Offering.
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Persons will breach any law inside and/or outside Hong Kong as a result of the
acceptance of your offer to purchase, or any action arising from your rights and
obligations under the terms and conditions contained in this prospectus;
(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf is not
financed directly or indirectly by the Company, any of the directors, chief executives,
substantial Shareholder(s) or existing shareholder(s) of the Company or any of its
subsidiaries or any of their respective close associates; and (b) you are not accustomed
or will not be accustomed to taking instructions from the Company, any of the directors,
chief executives, substantial shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates in relation to the
acquisition, disposal, voting or other disposition of the Shares registered in your name
or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong Kong
Offer Shares to you and that you may be prosecuted for making a false declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated to
you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application has
been or will be made for your benefit by giving electronic application instructions to
HKSCC directly or indirectly or through the application channel of the H Share
Registrar or by any one as your agent or by any other person; and
(xix) (if you are making the application as an agent for the benefit of another person) warrant
that (1) no other application has been or will be made by you as agent for or for the
benefit of that person or by that person or by any other person as agent for that person
by giving electronic application instructions to HKSCC and (2) you have due authority
to give electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Hong Kong Offer Shares through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website ......... The designated results of allocation
at www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function.
The full list of (i) wholly or
partially successful applicants
using the White Form eIPO
service and HKSCC EIPO
channel; and (ii) the number of
Hong Kong Offer Shares
conditionally allotted to them,
among other things, will be
displayed on the “Allotment
Results” page of the White Form
eIPO service at
www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment
).
24 hours, from 11:00 p.m. and
Monday, March 9, 2026 to 12:00
midnight on Sunday, March 15,
2026 (Hong Kong time)
The Stock Exchange’s website at
www.hkexnews.hk
and our
website at www.meigsmart.com
which will provide links to the
above mentioned websites of the
H Share Registrar.
No later than 11:00 p.m. on
Monday, March 9, 2026 (Hong
Kong time).
Telephone ....... +852 2862 8555 — the allocation
results telephone enquiry line
provided by the H Share Registrar
between 9:00 a.m. and 6:00 p.m., on
Tuesday, March 10, 2026 to
Friday, March 13, 2026
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For those applying through HKSCC EIPO channel, you may also check with your broker or
custodian from 6:00 p.m. on Friday, March 6, 2026 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Friday, March 6, 2026 on a 24-hour basis and should report any discrepancies on allotments to
HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the final Offer Price, the level of indications of interest in the
International Offering, the level of applications in the Hong Kong Public Offering and the basis of
allocations of Hong Kong Offer Shares on the Stock Exchange’s website at www.hkexnews.hk
and
our website at www.meigsmart.com by no later than 11:00 p.m. on Monday, March 9, 2026 (Hong
Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and nominees
have full discretion to reject or accept any application, or to accept only part of any application,
without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not grant
permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
HOW TO APPLY FOR HONG KONG OFFER SHARES
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 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
4. If:
 you make multiple applications or suspected multiple applications. You may refer to the
paragraph headed “A. Application for Hong Kong Offer Shares — 5. Multiple
Applications Prohibited” in this section on what constitutes multiple applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC Participants
will be required to hold sufficient application funds on deposit with their Designated Bank before
balloting. After balloting of Hong Kong Offer Shares, the Receiving Bank will collect the portion
of these funds required to settle each HKSCC Participant’s actual Hong Kong Offer Share
allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in settling
payment for your allotted shares, HKSCC will contact the defaulting HKSCC Participant and its
Designated Bank to determine the cause of failure and request such defaulting HKSCC Participant
to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected Hong
Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer Shares
applied for by you through the broker or custodian may be affected to the extent of the settlement
failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares due to the
money settlement failure by such HKSCC Participant. None of us, the Relevant Persons, the H
Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are not allocated to
you due to the money settlement failure.
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D. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You will receive one Share certificate for all Hong Kong Offer Shares allotted to you under
the Hong Kong Public Offering (except pursuant to applications made through the HKSCC EIPO
channel where the Share certificates will be deposited into CCASS as described below).
No temporary document of title will be issued in respect of the Shares. No receipt will be
issued for sums paid on application.
Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date,
provided that the Global Offering has become unconditional and the right of termination described
in the section headed “Underwriting” has not been exercised. Investors who trade Shares prior to
the receipt of Share certificates or the Share certificates becoming valid do so entirely at their own
risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Despatch/collection of Share certificate 1
For physical H Share
certificates of 1,000,000 or
more Hong Kong Offer
Shares issued under your
own name
Collection in person from our H Share
Registrar at Shops 1712−1716, 17th
Floor, Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong.
Time: from 9:00 a.m. to 1:00 p.m. on
Tuesday, March 10, 2026 (Hong Kong
time)
Share certificate(s) will be issued in
the name of HKSCC Nominees,
deposited into CCASS and
credited to your designated
HKSCC Participant’s stock
account
No action by you is required
1 Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or an
“extreme conditions” announcement issued after a super typhoon in force in Hong Kong in the morning on the
Monday, March 9, 2026 rendering it impossible for the relevant share certificates to be dispatched to HKSCC in a
timely manner, the Company shall procure the Share Registrar to arrange for delivery of the supporting documents
and share certificates in accordance with the contingency arrangements as agreed between them. You may refer to
“— E. Severe Weather Arrangements” in this section.
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White Form eIPO service HKSCC EIPO channel
If you are an individual, you must not
authorise any other person to collect
for you. If you are a corporate
applicant, your authorised
representative must bear a letter of
authorization from your corporation
stamped with your corporation’s chop.
Both individuals and authorised
representatives must produce, at the
time of collection, evidence of identity
acceptable to the H Share Registrar.
Note: If you do not collect your Share
certificate(s) personally within the
time above, it/they will be sent to the
address specified in your application
instructions by ordinary post at your
own risk.
For physical share certificates
of less than 1,000,000 Offer
Shares issued under your
own name
Your Share certificate(s) will be sent to
the address specified in your
application instructions by ordinary
post at your own risk.
Time: Monday, March 9, 2026
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--- page 439 ---
White Form eIPO service HKSCC EIPO channel
If you are an individual, you must not
authorise any other person to collect
for you. If you are a corporate
applicant, your authorised
representative must bear a letter of
authorization from your corporation
stamped with your corporation’s chop.
Both individuals and authorised
representatives must produce, at the
time of collection, evidence of identity
acceptable to the H Share Registrar.
Note: If you do not collect your Share
certificate(s) personally within the
time above, it/they will be sent to the
address specified in your application
instructions by ordinary post at your
own risk
For physical H Share
certificates of less than
1,000,000 Hong Kong Offer
Shares issued under your
own name
Your Share certificate(s) will be sent to
the address specified in your
application instructions by ordinary
post at your own risk
Time: Monday, March 9, 2026
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--- page 440 ---
White Form eIPO service HKSCC EIPO channel
Refund mechanism for surplus application monies paid by you
Date Tuesday, March 10, 2026 Subject to the arrangement between
you and your broker or custodian
Responsible party H Share Registrar Your broker or custodian
Application monies paid
through single bank
account
White Form e-Refund payment
instructions to your designated bank
account
Your broker or custodian will
arrange refund to your designated
bank account subject to the
arrangement between you and it
Application monies paid
through multiple bank
accounts
Refund cheque(s) will be despatched to
the address as specified in your
application instructions by ordinary
post at your own risk
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Thursday, March 5, 2026 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 an “extreme conditions” announcement issued after a super typhoon (“ Extreme
Conditions ”),
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, March 5, 2026.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on the
next business day which does not have Severe Weather Signals in force at any time between 9:00
a.m. and 12:00 noon.
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Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the dates
mentioned in the section headed “Expected Timetable” in this prospectus, an announcement will be
made and published on the Stock Exchange’s website at www.hkexnews.hk
and our website at
www.meigsmart.com of the revised timetable.
If a Severe Weather Signal is hoisted on Monday, March 9, 2026, the H Share Registrar will
make appropriate arrangements for the delivery of the share certificates to the CCASS
Depository’s service counter so that they would be available for trading on Tuesday, March 10,
2026.
If a Severe Weather Signal is hoisted on Tuesday, March 10, 2026: for physical share
certificates of 1,000,000 or more Hong Kong Offer Shares issued under your own name, you may
collect your Share certificate in person from the H Share Registrar’s office after the Severe
Weather Signal is lowered or cancelled (e.g. in the afternoon of Tuesday, March 10, 2026 or on
Wednesday, March 11, 2026).
If a Severe Weather Signal is hoisted on Monday, March 9, 2026: for physical share
certificates of less than 1,000,000 of Hong Kong Offer Shares issued under your own name,
despatch will be made by ordinary post when the post office re-opens after the Severe Weather
Signal is lowered or cancelled (e.g. in the afternoon of Monday, March 9, 2026 or on Tuesday,
March 10, 2026).
Prospective investors should be aware that if they choose to receive physical share
certificates issued in their own name, there may be a delay in receiving the share certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the Stock
Exchange and we comply with the stock admission requirements of HKSCC, the Shares will be
accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with
effect from the date of commencement of dealings in the Shares or any other date HKSCC
chooses. Settlement of transactions between Exchange Participants is required to take place in
CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into CCASS.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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You should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have read,
understood and agree to all of the terms of the Personal Information Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share Registrar
in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of
Hong Kong).
2. Reasons for the Collection of Y our Personal Data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure that
personal data supplied to the Company or its agents and the H Share Registrar is accurate and
up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer Shares
into or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data supplied.
3. Purposes
Your personal data may be used, held, processed, and/or stored (by whatever means) for the
following purposes:
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 443 ---
 processing your application and refund cheque and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of allocation of
Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the Shares
including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the Shares and/or regulators and/or any other purposes to which applicants
and holders of the Shares may from time to time agree.
4. Transfer of Personal Data
Personal data held by the Company and the H Share Registrar relating to the applicants for
and holders of Hong Kong Offer Shares will be kept confidential but the Company and the H
Share Registrar may, to the extent necessary for achieving any of the above purposes, disclose,
obtain or transfer (whether within or outside Hong Kong) the personal data to, from or with any of
the following:
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 444 ---
 the Company’s appointed agents such as financial advisers, receiving bank and overseas
principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar for the purposes of providing its services or
facilities or performing its functions in accordance with its rules or procedures and
operating FINI and CCASS (including where applicants for the Hong Kong Offer Shares
request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental bodies
or otherwise as required by laws, rules or regulations, including for the purpose of the
Stock Exchange’s administration of the Listing Rules and the SFC’s performance of its
statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have or
propose to have dealings, such as their bankers, solicitors, accountants or brokers etc.
5. Retention of Personal Data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfil the purposes for which the
personal data were collected. Personal data which is no longer required will be destroyed or dealt
with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong
Kong).
6. Access to and Correction of Personal Data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether the
Company or the H Share Registrar hold their personal data, to obtain a copy of that data, and to
correct any data that is inaccurate. The Company and the H Share Registrar have the right to
charge a reasonable fee for the processing of such requests. All requests for access to data or
correction of data should be addressed to the Company and the H Share Registrar, at their
registered address disclosed in the section headed “Corporate Information” in this prospectus or as
notified from time to time, for the attention of the company secretary, or the H Share Registrar for
the attention of the privacy compliance officer.
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--- page 445 ---
The following is the text of a report, prepared for the purpose of incorporation in this
prospectus, received from the independent reporting accountants, Ernst & Young, Certified Public
Accountants, Hong Kong.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
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ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF MEIG SMART TECHNOLOGY CO., LTD. AND CHINA
INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED
Introduction
We report on the historical financial information of MeiG Smart Technology Co., Ltd. (the
“Company ”) and its subsidiaries (together, the “ Group ”) set out on pages I-4 to I-150, which
comprises the consolidated statements of profit or loss and other comprehensive income,
statements of changes in equity and statements of cash flows of the Group for each of the years
ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025 (the
“Relevant Periods ”), and the consolidated statements of financial position of the Group and the
statements of financial position of the Company as at 31 December 2022, 2023 and 2024 and 30
September 2025 and material accounting policy information and other explanatory information
(together, the “ Historical Financial Information ”). The Historical Financial Information set out
on pages I-4 to I-150 forms an integral part of this report, which has been prepared for inclusion
in the prospectus of the Company dated 27 February 2026 (the “ Prospectus ”) in connection with
the initial listing of the shares of the Company on the Main Board of The Stock Exchange of Hong
Kong Limited (the “ Stock Exchange ”).
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation set out in
note 2.1 to the Historical Financial Information, and for such internal control as the directors
determine is necessary to enable the preparation of the Historical Financial Information that is free
from material misstatement, whether due to fraud or error.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 446 ---
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 Accountants’ Reports on Historical Financial
Information in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants (“ HKICPA”). This standard requires that we comply with ethical standards and plan
and perform our work to obtain reasonable assurance about whether the Historical Financial
Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement of the
Historical Financial Information, whether due to fraud or error. In making those risk assessments,
the reporting accountants consider internal control relevant to the entity’s preparation of the
Historical Financial Information that gives a true and fair view in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information, in order to design
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the Historical Financial
Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the financial position of the Group and the Company as
at 31 December 2022, 2023 and 2024 and 30 September 2025 and of the financial performance and
cash flows of the Group for each of the Relevant Periods in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative financial information of the Group which
comprises the consolidated statement of profit or loss and other comprehensive income, statement
of changes in equity and statement of cash flows of the Group for the nine months ended 30
September 2024 and other explanatory information (the “ Interim Comparative Financial
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 447 ---
Information ”). The directors of the Company are responsible for the preparation and presentation
of the Interim Comparative Financial Information in accordance with the basis of preparation set
out in note 2.1 to the Historical Financial Information. Our responsibility is to express a
conclusion on the Interim Comparative Financial Information based on our review. We conducted
our review in accordance with Hong Kong Standard on Review Engagements 2410 Review of
Interim Financial Information Performed by the Independent Auditor of the Entity issued by the
HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and
consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the Interim
Comparative Financial Information, for the purposes of the accountants’ report, is not prepared, in
all material respects, in accordance with the basis of preparation set out in note 2.1 to the
Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on the Stock Exchange
and the Companies (Winding Up and Miscellaneous Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying Financial
Statements as defined on page I-4 have been made.
Dividends
We refer to note 11 to the Historical Financial Information which contains information about
the dividends paid by the Company in respect of the Relevant Periods.
Certified Public Accountants
Hong Kong
27 February 2026
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 448 ---
I. HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical
Financial Information is based, were audited by Ernst & Young in accordance with Hong Kong
Standards on Auditing issued by the HKICPA (the “ Underlying Financial Statements ”).
The Historical Financial Information is presented in Renminbi (“ RMB”) and all values are
rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 449 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
REVENUE ................ 5 2,305,932 2,147,336 2,941,374 2,182,028 2,821,288
Cost of sales ............... (1,900,557) (1,751,198) (2,456,712) (1,837,399) (2,464,709)
Gross profit ............... 405,375 396,138 484,662 344,629 356,579
Other income and gains ........ 5 69,733 47,138 20,015 11,929 27,948
Selling and marketing expenses .... (46,359) (63,800) (59,190) (42,955) (46,171)
Administrative expenses ........ (59,167) (66,752) (70,676) (49,784) (54,353)
Research and development expenses . (185,909) (213,877) (208,136) (148,287) (153,125)
(Provision for)/reversal of
impairment losses on financial
assets .................. (7,318) (14,231) 6,556 11,200 6,296
Other expenses .............. (6,987) (6,764) (29,947) (18,198) (1,191)
Finance costs ............... 7 (13,886) (8,644) (6,297) (5,051) (7,348)
Share of profits and losses of joint
ventures ................ 16 (618) (511) (860) (580) (568)
Share of profits and losses of
associates ............... 17 (5,279) (5,570) (11,986) (8,364) (5,927)
PROFIT BEFORE TAX ....... 6 149,585 63,127 124,141 94,539 122,140
Income tax credit/(charge) ....... 10 (22,970) (518) 10,234 (4,041) (8,970)
PROFIT FOR THE
YEAR/PERIOD ........... 126,615 62,609 134,375 90,498 113,170
Attributable to:
Owners of the parent ......... 127,836 64,509 135,572 91,356 113,170
Non-controlling interests ...... (1,221) (1,900) (1,197) (858) —
126,615 62,609 134,375 90,498 113,170
EARNINGS PER SHARE
ATTRIBUTABLE TO
ORDINARY EQUITY
HOLDERS OF THE PARENT 12
Basic (RMB per share) ......... 0.54 0.25 0.52 0.35 0.43
Diluted (RMB per share) ........ 0.54 0.25 0.52 0.35 0.43
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 450 ---
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
PROFIT FOR THE YEAR/PERIOD ..... 126,615 62,609 134,375 90,498 113,170
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may be
reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of
foreign operations ............... 2,134 212 1,877 (414) (2,468)
Net other comprehensive income that may be
reclassified to profit or loss in subsequent
periods ....................... 2,134 212 1,877 (414) (2,468)
OTHER COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD, NET OF
TAX ........................ 2,134 212 1,877 (414) (2,468)
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD .......... 128,749 62,821 136,252 90,084 110,702
Attributable to:
Owners of the parent .............. 129,970 64,721 137,449 90,942 110,702
Non-controlling interests ............ (1,221) (1,900) (1,197) (858) —
128,749 62,821 136,252 90,084 110,702
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 451 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment ........... 13 25,105 21,682 17,885 16,768
Other intangible assets ............... 14 75,446 118,667 109,078 104,728
Right-of-use assets .................. 15 40,900 24,037 9,405 6,975
Investment in joint ventures ............ 16 2,399 1,888 1,479 2,260
Investment in associates ............... 17 63,663 58,168 46,181 54,583
Equity investments at fair value through profit
or loss (“ FVTPL ”) ................ 18 198,875 234,246 189,971 176,137
Prepayment, other receivables and other assets . 22 9,693 21,190 16,536 23,982
Deferred tax assets .................. 29 41,085 59,564 88,410 89,704
Total non-current assets ............... 457,166 539,442 478,945 475,137
CURRENT ASSETS
Inventories ....................... 19 490,386 526,319 650,552 812,156
Trade and bills receivables ............. 20 420,301 659,426 1,016,069 761,422
Prepayments, other receivables and other
assets ........................ 22 268,613 232,598 254,122 454,017
Debt investments at fair value through other
comprehensive income (“ FVOCI ”)....... 21 5,122 38,427 9,992 26,739
Restricted cash .................... 23 12,828 9,584 7,998 5,340
Cash and cash equivalents ............. 23 72,287 138,926 341,879 315,854
Total current assets .................. 1,269,537 1,605,280 2,280,612 2,375,528
CURRENT LIABILITIES
Trade and bills payables .............. 24 331,384 485,880 579,916 571,106
Other payables and accruals ............ 25 68,204 60,037 109,140 86,723
Interest-bearing bank borrowings ......... 27 310,720 5,016 352,606 348,181
Lease liabilities .................... 15 16,808 16,470 8,592 6,288
Contract liabilities .................. 26 67,451 52,328 109,344 125,086
Tax payable ...................... 2,888 4,714 8,311 5,927
Total current liabilities ............... 797,455 624,445 1,167,909 1,143,311
NET CURRENT ASSETS ............. 472,082 980,835 1,112,703 1,232,217
TOTAL ASSETS LESS CURRENT
LIABILITIES ................... 929,248 1,520,277 1,591,648 1,707,354
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 452 ---
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings ......... 27 60,000 — — —
Deferred income ................... 28 950 3,875 3,875 3,875
Lease liabilities .................... 15 27,078 9,300 1,417 3,870
Deferred tax liabilities ................ 29 20,969 27,309 19,243 18,284
Total non-current liabilities ............. 108,997 40,484 24,535 26,029
Net assets ....................... 820,251 1,479,793 1,567,113 1,681,325
EQUITY
Equity attributable to owners of the parent
Share capital ..................... 30 239,667 261,641 261,802 262,629
Treasury shares .................... 30 (56,605) (41,999) (79,286) (67,044)
Reserves ........................ 31 636,356 1,261,218 1,384,597 1,485,740
819,418 1,480,860 1,567,113 1,681,325
Non-controlling interests .............. 833 (1,067) — —
Total equity ...................... 820,251 1,479,793 1,567,113 1,681,325
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 453 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2022
Attributable to owners of the parent
Non-controlling
interests TotalShare capital
Treasury
Shares
Capital
reserve
Statutory
surplus
reserve
Exchange
fluctuation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 30) (note 31) (note 31) (note 31) (note 31)
At 1 January 2022 ....... 184,729 (68,766) 239,914 18,271 (815) 315,928 689,261 2,054 691,315
Profit for the year ........ ————— 127,836 127,836 (1,221) 126,615
Other comprehensive income for
the year:
Exchange differences on
translation of foreign
operations ......... ———— 2,134 — 2,134 — 2,134
Total comprehensive income for
the year ........... ———— 2,134 127,836 129,970 (1,221) 128,749
Exercise of share options .... 265 — 4,772 — — — 5,037 — 5,037
Exercise of restricted shares
units ............. — 11,048 458 — — — 11,506 — 11,506
Equity-settled share-based
compensation expenses .... — — 8,455 — — — 8,455 — 8,455
Transfer from capital reserve ... 54,731 — (54,731) ——————
Transfer from retained profits .. — — — 4,150 — (4,150) — — —
Dividend ............ ————— (24,811) (24,811) — (24,811)
Others** ............ (58) 1,113 (1,055) ——————
At 31 December 2022 ..... 239,667 (56,605) 197,813* 22,421* 1,319* 414,803* 819,418 833 820,251
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 454 ---
Y ear ended 31 December 2023
Attributable to owners of the parent
Non-controlling
interests TotalShare capital
Treasury
Shares
Capital
reserve
Statutory
surplus
reserve
Exchange
fluctuation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 30) (note 31) (note 31) (note 31) (note 31)
At 1 January 2023 ....... 239,667 (56,605) 197,813 22,421 1,319 414,803 819,418 833 820,251
Profit for the year ........ ————— 64,509 64,509 (1,900) 62,609
Other comprehensive income for
the year:
Exchange differences on
translation of foreign
operations ......... ———— 2 1 2— 2 1 2— 2 1 2
Total comprehensive income for
the year ........... ———— 2 1 2 64,509 64,721 (1,900) 62,821
Capital contribution by
shareholders ......... 21,209 — 571,722 — — — 592,931 — 592,931
Exercise of share options .... 793 — 11,360 — — — 12,153 — 12,153
Exercise of restricted shares
units ............. — 14,321 429 — — — 14,750 — 14,750
Equity-settled share-based
compensation expenses .... — — 2,777 — — — 2,777 — 2,777
Transfer from retained profits .. — — — 125 — (125) — — —
Dividend ............ ————— (25,890) (25,890) — (25,890)
Others** ............ (28) 285 (257) ——————
At 31 December 2023 ..... 261,641 (41,999) 783,844* 22,546* 1,531* 453,297* 1,480,860 (1,067) 1,479,793
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 455 ---
Y ear ended 31 December 2024
Attributable to owners of the parent
Non-controlling
interests TotalShare capital
Treasury
Shares
Capital
reserve
Statutory
surplus
reserve
Exchange
fluctuation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 30) (note 31) (note 31) (note 31) (note 31)
At 1 January 2024 ....... 261,641 (41,999) 783,844 22,546 1,531 453,297 1,480,860 (1,067) 1,479,793
Profit for the year ........ ————— 135,572 135,572 (1,197) 134,375
Other comprehensive income for
the year:
Exchange differences on
translation of foreign
operations ......... ———— 1,877 — 1,877 — 1,877
Total comprehensive income for
the year ........... ———— 1,877 135,572 137,449 (1,197) 136,252
Exercise of share options .... 161 — 2,774 — — — 2,935 — 2,935
Exercise of restricted shares
units ............. — — 390 — — — 390 — 390
Equity-settled share-based
compensation expenses .... — — 11,118 — — — 11,118 — 11,118
Transfer from retained profits .. — — — 1,287 — (1,287) — — —
Dividend (note 11) ....... ————— (25,802) (25,802) — (25,802)
Shares repurchased ....... — (37,287) ———— (37,287) — (37,287)
Deemed disposal of a subsidiary . ————— (2,550) (2,550) 2,264 (286)
At December 31, 2024 ..... 261,802 (79,286) 798,126* 23,833* 3,408* 559,230* 1,567,113 — 1,567,113
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 456 ---
Nine months ended 30 September 2025
Attributable to owners of the parent
Non-controlling
interests TotalShare capital
Treasury
Shares
Capital
reserve
Statutory
surplus
reserve
Exchange
fluctuation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 30) (note 31) (note 31) (note 31) (note 31)
At 1 January 2025 ...... 261,802 (79,286) 798,126 23,833 3,408 559,230 1,567,113 — 1,567,113
Profit for the period ...... ————— 1 13,170 113,170 — 113,170
Other comprehensive income for
the period:
Exchange differences on
translation of foreign
operations ......... ———— (2,468) — (2,468) — (2,468)
Total comprehensive income for
the period .......... ———— (2,468) 113,170 110,702 — 110,702
Equity-settled share-based
compensation expenses .... — — 18,599 — — — 18,599 — 18,599
Shares issued and granted for
restricted share incentive plan . 263 (5,997) 5,734 ——————
Exercise of restricted shares
units ............. — 25,730 (11,226) — — — 14,504 — 14,504
Exercise of share options .... 564 — 11,263 — — — 11,827 — 11,827
Dividend ........... — 456 — — — (33,929) (33,473) — (33,473)
Shares repurchased ....... — (7,947) ———— (7,947) — (7,947)
At 30 September 2025 ..... 262,629 (67,044) 822,496* 23,833* 940* 638,471* 1,681,325 — 1,681,325
* These reserve accounts comprised the consolidated reserves of RMB636,356,000, RMB1,261,218,000,
RMB1,384,597,000 and RMB1,485,740,000 in the consolidated statements of financial position as at 31 December
2022, 2023 and 2024 and 30 September 2025, respectively.
** Others mainly represent the equity impact on the deregistration of previously repurchased shares.
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 457 ---
Nine months ended 30 September 2024 (Unaudited)
Attributable to owners of the parent
Non-controlling
interests TotalShare capital
Treasury
Shares
Capital
reserve
Statutory
surplus
reserve
Exchange
fluctuation
reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 30) (note 30) (note 31) (note 31) (note 31) (note 31)
At 1 January 2024 ....... 261,641 (41,999) 783,844 22,546 1,531 453,297 1,480,860 (1,067) 1,479,793
Profit for the period ....... ————— 91,356 91,356 (858) 90,498
Other comprehensive income for
the period:
Exchange differences on
translation of foreign
operations ......... ———— (414) — (414) — (414)
Total comprehensive income for
the period .......... ———— (414) 91,356 90,942 (858) 90,084
Equity-settled share-based
compensation expenses .... — — 5,539 — — — 5,539 — 5,539
Exercise of share options .... 161 — 2,774 — — — 2,935 — 2,935
Dividend ............ ————— (25,802) (25,802) — (25,802)
Shares repurchased ....... — (27,285) ———— (27,285) — (27,285)
Contributions from
non-controlling interests .... ——————— 2 4 5 2 4 5
At 30 September 2024
(unaudited) .......... 261,802 (69,284) 792,157 22,546 1,117 518,851 1,527,189 (1,680) 1,525,509
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 458 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before tax ................... 149,585 63,127 124,141 94,539 122,140
Adjustments for:
Finance costs ................... 7 13,886 8,644 6,297 5,051 7,348
Interest income .................. 5 (1,076) (4,276) (2,497) (1,928) (2,169)
Share of profits and losses of joint ventures
and associates ................. 5,897 6,081 12,846 8,944 6,495
Gain on disposal of a subsidiary ....... 5, 32 — — (4,906) — —
Impairment/(reversal of impairment) of
trade and bills receivables .......... 20 5,361 13,594 (7,638) (12,056) (5,040)
Impairment of prepayments, other
receivables and other assets ......... 22 1,957 637 1,082 856 (1,256)
Write-down of inventories to net realisable
value ....................... 19 6,362 15,216 16,342 9,986 13,984
Depreciation of property, plant and
equipment .................... 13 6,670 6,198 6,137 4,920 4,079
Depreciation of right-of-use assets ...... 15(a) 19,040 16,934 14,647 12,004 5,594
Amortisation of other intangible assets .... 14 15,652 30,748 38,287 29,072 28,361
Losses/(gains) on disposal of items of
property, plant and equipment ....... 6 26 84 13 8 9
Loss/(gain) on early termination of a lease . 6 — 105 (78) (78) —
Gain on sublease of right-of-use assets ... 6 — — — — (989)
Fair value (gains)/losses on financial assets
measured at FVPL .............. 5/6 (43,875) (25,371) (1,725) — 1,165
Government grants ................ (1,571) — — — —
Equity-settled share-based payment
expense ..................... 33 8,455 2,777 11,118 5,537 16,535
Foreign exchange difference .......... (3,974) (5,018) (9,612) (7,390) (8,229)
182,395 129,480 204,454 149,465 188,027
(Increase)/decrease in inventories ........ (100,886) (51,130) (145,808) 45,402 (175,514)
(Increase)/decrease in trade and bills
receivables ..................... (97,948) (259,630) (358,800) (246,527) 114,368
Decrease/(increase) in debt investments at fair
value through other comprehensive income . 13,302 (33,305) 28,435 20,803 (16,747)
Decrease/(increase) in prepayments, other
receivables and other assets .......... 9,763 24,381 (24,694) (92,286) (185,408)
Increase/(decrease) in trade and bills
payables ...................... 62,620 159,514 114,889 56,738 134,047
(Decrease)/increase in other payables and
accruals ...................... (36,934) 17,717 13,833 (7,783) (19,485)
(Decrease)/increase in contract liabilities .... (6,327) (15,123) 57,997 40,120 15,742
Increase in deferred income ............ — 2,92 5———
Decrease/(increase) in restricted cash ...... 8,017 — — — —
Cash generated from/(used in) operation .... 34,002 (25,171) (109,694) (34,068) 55,030
Interest received ................... 1,076 4,276 2,497 1,928 2,020
Income tax paid ................... (3,254) (10,418) (22,693) (9,524) (12,590)
Net cash flows from/(used in) operating
activities ...................... 31,824 (31,313) (129,890) (41,664) 44,460
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 459 ---
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from disposal of items of property,
plant and equipment ............... —2 62 02 0 1
Proceeds from disposals of equity investments
at fair value through profit or loss ...... — — 12,000 12,000 10,000
Investment income from equity investments at
fair value through profit or loss ........ — — 34,000 34,000 2,669
Purchases of items of property, plant and
equipment, other intangible assets, and
other assets .................... (56,126) (80,883) (14,049) (5,585) (21,966)
Capitalized development costs .......... (5,386) (7,536) (13,469) (3,264) (8,420)
Proceed from sublease of right-of-use assets .. — — — — 4,142
Net cash outflows in respect of the deemed
disposal of a subsidiary ............. — — (1,294) — —
Purchase of a shareholding in joint ventures .. (900) — (450) (450) (1,350)
Purchase of a shareholding in associates ... (36,000) — — — (14,309)
Purchases of equity investments at fair value
through profit or loss .............. (55,000) (10,000) — — —
Net cash flows (used in)/from investing
activities ...................... (153,412) (98,393) 16,758 36,721 (29,233)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of ordinary shares ... 4,838 607,310 3,810 3,810 10,158
Proceeds from subscription of restricted
shares ........................ — — 37,031 37,031 11,103
New bank borrowings ............... 513,326 74,900 729,500 507,000 860,000
Repayment of bank borrowings .......... (437,072) (439,900) (382,000) (382,000) (865,000)
Cash received from the release of restricted
cash for issuance of bank acceptance notes . 60,042 48,227 36,568 36,568 7,945
Restricted cash paid for issuance of bank
acceptance notes ................. (62,735) (44,983) (34,980) (26,982) (5,288)
Payment of listing expense ............ — — — — (11,536)
Payment of expense for issuance of ordinary
shares ........................ (2,700) (625) — — —
Principal portion of lease payments ....... (21,157) (21,339) (15,001) (13,757) (8,586)
Interest paid ..................... (12,922) (6,373) (5,366) (4,345) (6,401)
Payment for repurchase of own shares ..... — — (37,287) (27,285) (7,947)
Dividends paid .................... (24,811) (25,890) (25,802) (25,802) (33,929)
Net cash flows from/(used in) financing
activities ...................... 16,809 191,327 306,473 104,238 (49,481)
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIV ALENTS ......... (104,779) 61,621 193,341 99,295 (34,254)
Cash and cash equivalents at beginning of
year/period ..................... 173,092 72,287 138,926 138,926 341,879
Effect of foreign exchange rate changes, net .. 3,974 5,018 9,612 7,390 8,229
CASH AND CASH EQUIV ALENTS AT
END OF YEAR/PERIOD
........... 72,287 138,926 341,879 245,611 315,854
ANALYSIS OF BALANCES OF CASH
AND CASH EQUIV ALENTS
Cash and bank balances .............. 23 85,115 148,510 349,877 245,611 321,194
Less: restricted cash ................ 23 12,828 9,584 7,998 — 5,340
Cash and bank balances as stated in the
consolidated statements of financial
position and statements of cash flows .... 72,287 138,926 341,879 245,611 315,854
APPENDIX I ACCOUNTANTS’ REPORT
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STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment ........... 13 6,912 4,260 3,897 5,499
Other intangible assets ............... 14 44,397 64,789 38,494 27,710
Right-of-use assets .................. 15 21,908 12,624 4,662 —
Investment in subsidiaries ............. 175,782 178,279 190,416 209,383
Investments in a joint venture ........... 16 748 156 257 1,451
Investments in associates .............. 17 63,739 58,168 46,181 40,348
Prepayment, other receivables and other assets . 22 3,857 8,268 8,831 13,071
Deferred tax assets .................. 29 18,604 19,589 35,140 45,149
Total non-current assets ............... 335,947 346,133 327,878 342,611
CURRENT ASSETS
Inventories ....................... 19 454,376 487,213 536,969 688,971
Trade and bills receivables ............. 20 575,587 825,322 1,104,824 710,092
Prepayment, other receivables and other assets . 22 161,110 151,277 189,152 512,615
Debt investments at FVOCI ............ 21 2,965 34,136 8,012 14,538
Restricted cash .................... 23 12,828 9,584 7,998 5,340
Cash and cash equivalents ............. 23 34,893 58,723 241,722 166,532
Total current assets .................. 1,241,759 1,566,255 2,088,677 2,098,088
CURRENT LIABILITIES
Trade and bills payables .............. 24 627,207 733,475 834,702 879,937
Other payables and accruals ............ 25 52,255 21,779 69,207 63,110
Interest-bearing bank borrowings ......... 27 260,672 — 352,606 348,181
Lease liabilities .................... 15 10,036 9,068 4,826 2,052
Contract liabilities .................. 26 45,877 34,583 79,756 100,037
Tax payable ...................... — — 2,984 —
Total current liabilities ............... 996,047 798,905 1,344,081 1,393,317
NET CURRENT ASSETS ............. 245,712 767,350 744,596 704,771
TOTAL ASSETS LESS CURRENT
LIABILITIES ................... 581,659 1,113,483 1,072,474 1,047,382
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 461 ---
As at 31 December
As at
30 September
Notes 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings ......... 27 60,000 — — —
Deferred income ................... 28 — 2,925 2,925 2,925
Lease liabilities .................... 15 15,124 6,056 825 —
Total non-current liabilities ............. 75,124 8,981 3,750 2,925
Net assets ....................... 506,535 1,104,502 1,068,724 1,044,457
EQUITY
Share capital ..................... 30 239,667 261,641 261,802 262,629
Treasury shares .................... 30 (56,605) (41,999) (79,286) (67,044)
Reserves ........................ 31 323,473 884,860 886,208 848,872
Total equity ...................... 506,535 1,104,502 1,068,724 1,044,457
APPENDIX I ACCOUNTANTS’ REPORT
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II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE INFORMATION
MeiG Smart Technology Co., Ltd. (the “ Company ”) is a company established under the laws
of the People’s Republic of China (the “ PRC”) with limited liability on 5 April 2007 and
converted into a joint stock company with limited liability on 14 May 2015. With the approval of
the China Securities Regulatory Commission, the Company’s A shares was listed on the Shenzhen
Stock Exchange (stock code: 002881.SZ) on 22 June 2017. The registered office address of the
Company is 2/F, No.5 Lingxia Road, Fenghuang Community, Fuyong Street, Bao’an District,
Shenzhen, Guangdong, PRC.
During the Relevant Periods, the Company and its subsidiaries (collectively referred to as the
“Group ”) are principally engaged in the design, research and development (“ R&D”), and sale of
wireless communication modules and solutions.
As at 30 September 2025, the Company had direct and indirect interests in its subsidiaries, all
of which are private limited liability companies (or, if incorporated outside Hong Kong, have
substantially similar characteristics to a private company incorporated in Hong Kong), the
particulars of which are set out below:
Name
Place and date of
incorporation/ registration
and place of operations
Issued ordinary
share/registered capital
Percentage of equity attributable
to the Company Principal activities
Direct Indirect
Shenzhen Meige Zhilian
Information Technology Co.,
Ltd. (Ҧஔ
ʮ̡)* (“ MeiG Zhilian ”)
(note (d)) ............
PRC/Chinese
Mainland,
15 October 2018
RMB80,000,000 100% — R&D and design
Zhongge Intelligent Technology
(Shanghai) Co., Ltd. (౽ঐ
Ҧ(ɪऎ)ʮ̡)*
(“ZhongGe Shanghai ”)
(note (d)) ............
PRC/Chinese
Mainland,
23 March 2018
RMB10,000,000 100% — R&D and design
MeiG Smart Technology (Europe)
GmbH (note(c)) .........
Germany,
28 June 2022
EUR200,000 100% — Sales and supply chain
APPENDIX I ACCOUNTANTS’ REPORT
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Name
Place and date of
incorporation/ registration
and place of operations
Issued ordinary
share/registered capital
Percentage of equity attributable
to the Company Principal activities
Direct Indirect
Forge International Co., Ltd.
(“Forge International ”)
(note (b)) ............
Hong Kong,
16 December 2014
HKD100,000 100% — Sales and supply chain
MeiG Smart Technology France . France,
15 April 2025
EUR40,000 — 100% Sales and supply chain
Xi’an Zhaoge Electronic
Information Technology Co.,
Ltd. (ҦஔϞ
ʮ̡)* (“ Xi’an ZhaoGe ”)
(note (a)) ............
PRC/Chinese
Mainland, 23
October 2014
RMB2,000,000 100% — R&D and design
Shanghai Meixiao Intelligent
Information Technology Co.,
Ltd. (ҦஔϞ
ʮ̡)* (“ MeiXiao
Shanghai ”) (note (d)) ......
PRC/Chinese
Mainland, 15
August 2023
RMB200,000,000 100% — R&D and design
Zhongge Intelligent Technology
(Nantong) Co., Ltd. (౽ঐ
Ҧஔ(ஷ)ʮ̡)*
(“ZhongGe Nantong ”)
(note (d)) ............
PRC/Chinese
Mainland, 18 June
2024
RMB10,000,000 100% — R&D and design
Shenzhen Meige Smart
Investment and
Entrepreneurship Investment
Co., Ltd. (౽ҳ௴ุ
ʮ̡ )* (“ MeiG
Investment ”) (note (d)) .....
PRC/Chinese
Mainland, 12
December 2019
RMB50,000,000 100% — Investment
* The English names of all group companies registered in the PRC represent the best efforts made by the directors of
the Company to translate the Chinese names of these companies as they do not have official English names.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 464 ---
Notes:
(a) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024 prepared
under China Accounting Standards of Business Enterprises were audited by Shan’Xi Tangdu Certified Public
Accountants Co., Ltd. (ப΂ʮ̡ ), Beijing Zhiqin Certified Public Accountants LLP (
ה( ౷ஷΥྫ )) and Beijing Hexin Certified Public Accountants LLP (ԫਕ
ה(౷ஷΥྫ)), respectively, certified public accountants registered in the PRC.
(b) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024 prepared
under Hong Kong Small and Medium-sized Entity Financial Reporting Standard were audited by RICHFUL CPA
Limited, certified public accountants registered in Hong Kong.
(c) The statutory financial statement of this entity for the year ended 31 December 2023 prepared under the Dutch
Generally Accepted Accounting Principles were audited by PKF Fasselt Partnerschaft mbB, certified public
accountants registered in Germany.
(d) As at the date of this report, no audited financial statements have been prepared for these entities for the years
ended 31 December 2022, 2023 and 2024.
(e) In 2024, one investor increased its shareholding interest in Pinsu Zhilian Information Technology Co., Ltd. ( ଉέ̹
ʮ̡ )( “ Pinsu Zhilian ”), the then subsidiary of the Company, by making addition capital
injection to Pinsu Zhilian. Upon the completion of the capital injection, the Company lost its control over Pinsu
Zhilian. Further details of this deemed disposal are included in note 32 to the Historical Financial Information.
The carrying amounts of the Company’s investments in subsidiaries is as below:
Y ear ended 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Investments, at cost .............. 143,500 143,500 146,000 150,500
Share based payment ............. 32,282 34,779 44,416 58,883
Total ....................... 175,782 178,279 190,416 209,383
2.1 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with IFRS Accounting
Standards, which comprise all standards and interpretations approved by the International
Accounting Standards Board (“ IASB”). All IFRS Accounting Standards effective for the
accounting period commencing from 1 January 2025, together with the relevant transitional
provisions, have been early adopted by the Group in the preparation of the Historical Financial
Information throughout the Relevant Periods and in the period covered by the Interim Comparative
Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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The Historical Financial Information has been prepared under the historical cost convention
except for certain equity investments at FVTPL and debt investments at FVOCI which have been
measured at fair value at the end of each of the Relevant Periods and in the period covered by the
Interim Comparative Financial Information.
Basis of consolidation
The Historical Financial Information includes the financial information of the Group for the
Relevant Periods and in the period covered by the Interim Comparative Financial Information. A
subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the
Company. Control is achieved when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over
the investee (i.e., existing rights that give the Group the current ability to direct the relevant
activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the
Company has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial information of the subsidiaries is prepared for the same reporting period as the
Company, using consistent accounting policies. The results of subsidiaries are consolidated from
the date on which the Group obtains control, and continue to be consolidated until the date that
such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the
owners of the parent of the Group and to the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between members of the Group are
eliminated in full on consolidation.
APPENDIX I ACCOUNTANTS’ REPORT
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The Group reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control described above. A
change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including
goodwill), liabilities, any non-controlling interest and the exchange fluctuation reserve; and
recognises the fair value of any investment retained and any resulting surplus or deficit in profit or
loss. The Group’s share of components previously recognised in other comprehensive income is
reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be
required if the Group had directly disposed of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE IFRS ACCOUNTING STANDARDS
The Group has not applied the following new and revised IFRS Accounting Standards, that
have been issued but are not yet effective, in the Historical Financial Information. The Group
intends to apply these new and revised IFRS Accounting Standards, if applicable, when they
become effective.
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor
and its Associate or Joint V enture
1
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of
Financial Instruments 2
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity 2
Annual Improvements to IFRS
Accounting Standards
— V olume 11
Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10
and IAS 7
2
IFRS 18 Presentation and Disclosure in the Financial
Statements 3
IFRS 19 and its amendments Subsidiaries without Public Accountability:
Disclosures 3
Amendments to IAS 21 Translation to a Hyperinflationary Presentation
Currency 3
1 No mandatory effective date yet determined but available for adoption
2 Effective for annual periods beginning on or after 1 January 2026
3 Effective for annual/reporting periods beginning on or after 1 January 2027
The Group is in the process of making an assessment of the impact of these new and revised
IFRS Accounting Standards upon initial application. So far, the Group considers that these new
and revised IFRS Accounting Standards, except for IFRS 18, may result in changes in certain
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 467 ---
accounting policies but are likely to have a significant impact on the Group’s financial
performance and financial position in the period of initial application. The application of IFRS 18
is not expected to have a material impact on the financial position of the Group but is expected to
affect the presentation of the consolidated statements of profit or loss and other comprehensive
income and consolidated statements of cash flows and disclosures in the future financial
information. The Group will continue to assess the impact of IFRS 18 on the Group’s financial
information.
2.3 MATERIAL ACCOUNTING POLICIES
Investments in subsidiaries
In the Company’s statements of financial position, an investment in a subsidiary is stated at
cost less any impairment losses unless the investment is classified as held for sale (or included in a
disposal group) and accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations . Dividends from a subsidiary are recognised in the Company’s profit or
loss when the Company’s right to receive the dividends is established.
Investments in associates and joint ventures
An associate is an entity in which the Group has a long-term interest of generally not less
than 20% of the equity voting rights and over which it has significant influence. Significant
influence is the power to participate in the financial and operating policy decisions of the investee,
but is not control or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that have joint control of
the arrangement have rights to the net assets of the joint venture. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control.
The Group’s investments in associates and joint ventures are stated in the consolidated
statement of financial position at the Group’s share of net assets under the equity method of
accounting, less any impairment losses. The Group’s share of the post-acquisition results and other
comprehensive income of associates and joint ventures is included in the consolidated statement of
profit or loss and other comprehensive income. In addition, when there has been a change
recognised directly in the equity of the associate or joint venture, the Group recognises its share of
any changes, when applicable, in the consolidated statement of changes in equity. Unrealised gains
and losses resulting from transactions between the Group and its associates or joint ventures are
eliminated to the extent of the Group’s investments in the associates or joint ventures, except
APPENDIX I ACCOUNTANTS’ REPORT
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where unrealised losses provide evidence of an impairment of the assets transferred. Goodwill
arising from the acquisition of associates or joint ventures is included as part of the Group’s
investments in associates or joint ventures.
Upon loss of significant influence over the associate or joint control over the joint venture,
the Group measures and recognises any retained investment at its fair value. Any difference
between the carrying amount of the associate or joint venture upon loss of significant influence or
joint control and the fair value of the retained investment and proceeds from disposal is recognised
in profit or loss.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The consideration
transferred is measured at the acquisition date fair value which is the sum of the acquisition date
fair values of assets transferred by the Group, liabilities assumed by the Group to the former
owners of the acquiree and the equity interests issued by the Group in exchange for control of the
acquiree. For each business combination, the Group elects whether to measure the non-controlling
interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net
assets. All other components of non-controlling interests are measured at fair value.
Acquisition-related costs are expensed as incurred.
The Group determines that it has acquired a business when the acquired set of activities and
assets includes an input and a substantive process that together significantly contribute to the
ability to create outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts of the acquiree.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at
the acquisition date. Contingent consideration classified as an asset or liability is measured at fair
value with changes in fair value recognised in profit or loss. Contingent consideration that is
classified as equity is not remeasured and subsequent settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred, the amount recognised for non-controlling interests and any fair value of the Group’s
previously held equity interests in the acquiree over the identifiable assets acquired and liabilities
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 469 ---
assumed. If the sum of this consideration and other items is lower than the fair value of the net
assets acquired, the difference is, after reassessment, recognised in profit or loss as a gain on
bargain purchase.
After initial recognition, goodwill is measured at cost less any accumulated impairment
losses. Goodwill is tested for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. The Group performs its annual
impairment test of goodwill as at 31 December. For the purpose of impairment testing, goodwill
acquired in a business combination is, from the acquisition date, allocated to each of the Group’s
cash-generating units, or groups of cash-generating units, that are expected to benefit from the
synergies of the combination, irrespective of whether other assets or liabilities of the Group are
assigned to those units or groups of units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit
(group of cash-generating units) to which the goodwill relates. Where the recoverable amount of
the cash-generating unit (group of cash-generating units) is less than the carrying amount, an
impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a
subsequent period.
Where goodwill has been allocated to a cash-generating unit (or group of cash-generating
units) and part of the operation within that unit is disposed of, the goodwill associated with the
operation disposed of is included in the carrying amount of the operation when determining the
gain or loss on the disposal. Goodwill disposed of in these circumstances is measured based on the
relative value of the operation disposed of and the portion of the cash-generating unit retained.
Fair value measurement
The Group measures its equity investments at FVTPL at fair value at the end of each of the
Relevant Periods. Fair value is the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. The fair
value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either in the principal market for the asset or liability, or in the absence of a
principal market, in the most advantageous market for the asset or liability. The principal or the
most advantageous market must be accessible by the Group. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by selling it
to another market participant that would use the asset in its highest and best use.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 470 ---
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
Level 1 — based on quoted prices (unadjusted) in active markets for identical assets
or liabilities
Level 2 — based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is observable, either directly or
indirectly
Level 3 — based on valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis,
the Group determines whether transfers have occurred between levels in the hierarchy by
reassessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each of the Relevant Periods.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is
required (other than inventories, contract assets, deferred tax assets and financial assets), the
asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s
or cash-generating unit’s value in use and its fair value less costs of disposal, and is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets, in which case the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
An impairment loss is recognised only if the carrying amount of an asset exceeds its
recoverable amount. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. An impairment loss is charged to profit or
loss in the period in which it arises in those expense categories consistent with the function of the
impaired asset.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 471 ---
An assessment is made at the end of each of the Relevant Periods as to whether there is an
indication that previously recognised impairment losses may no longer exist or may have
decreased. If such an indication exists, the recoverable amount is estimated. A previously
recognised impairment loss of an asset other than goodwill is reversed only if there has been a
change in the estimates used to determine the recoverable amount of that asset, but not to an
amount higher than the carrying amount that would have been determined (net of any
depreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A
reversal of such an impairment loss is credited to profit or loss in the period in which it arises.
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the
Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent,
subsidiary or fellow subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of
the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either
the Group or an entity related to the Group;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 472 ---
(vii) a person identified in (a)(i) has significant influence over the entity or is a member
of the key management personnel of the entity (or of a parent of the entity); and
(viii) the entity, or any member of a group of which it is a part, provides key
management personnel services to the Group or to the parent of the Group.
Property, plant and equipment and depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less
accumulated depreciation and any impairment losses. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset to
its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into
operation, such as repairs and maintenance, is normally charged to profit or loss in the period in
which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a
major inspection is capitalised in the carrying amount of the asset as a replacement. Where
significant parts of property, plant and equipment are required to be replaced at intervals, the
Group recognises such parts as individual assets with specific useful lives and depreciates them
accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of
property, plant and equipment to its residual value over its estimated useful life. The principal
annual rates used for this purpose are as follows:
Buildings 4.50%
Machinery and equipment 9.00% to 18.00%
Motor vehicles 9.00% to 18.00%
Electronic equipment and others 18.00%
Leasehold improvements Over the shorter of lease terms and estimated useful lives
Where parts of an item of property, plant and equipment have different useful lives, the cost
of that item is allocated on a reasonable basis among the parts and each part is depreciated
separately. Residual values, useful lives and the depreciation method are reviewed, and adjusted if
appropriate, at least at each financial year end.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 473 ---
An item of property, plant and equipment including any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss on disposal or retirement recognised in profit or loss in the year the
asset is derecognised is the difference between the net sales proceeds and the carrying amount of
the relevant asset.
Construction in progress is stated at cost less any impairment losses, and is not depreciated.
It is reclassified to the appropriate category of property, plant and equipment when completed and
ready for use.
Intangible assets (other than goodwill)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is the fair value at the date of acquisition. The
useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with
finite lives are subsequently amortized over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period
and the amortisation method for an intangible asset with a finite useful life are reviewed at least at
each financial year end.
Intangible assets are stated at cost less any impairment losses and are amortised on the
straight-line basis over the following estimated useful lives:
Software 3 to 5 years
License rights 5 years
Research and development costs
Research and development cost are expensed and capitalized simultaneously during the
reporting period.
Expenditure incurred on projects to develop new products is capitalised and deferred only
when the Group can demonstrate the technical feasibility of completing the intangible asset so that
it will be available for use or sale, its intention to complete and its ability to use or sell the asset,
how the asset will generate future economic benefits, the availability of resources to complete the
project and the ability to measure reliably the expenditure during the development. Product
development expenditure which does not meet these criteria is expensed when incurred.
APPENDIX I ACCOUNTANTS’ REPORT
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Deferred development costs are stated at cost less any impairment losses and are amortised
using the straight-line basis over the commercial lives of the underlying products not exceeding
five years, commencing from the date when the products are put into commercial production. At
the end of each of the Relevant Periods, the Group conducts an impairment test on development
expenditure items.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. The Group recognises lease liabilities to make
lease payments and right-of-use assets representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of
the lease terms and the estimated useful lives of the assets as follows:
Buildings and premises 2 to 9 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the
cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful
life of the asset.
(b) Lease liabilities
Lease liabilities are recognized at the commencement date of the lease at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 475 ---
guarantees. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for termination of a lease, if the
lease term reflects the Group exercising the option to terminate the lease. The variable lease
payments that do not depend on an index or a rate are recognized as an expense in the period in
which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing
rate at the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the lease payments made. In addition, the carrying amount
of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in
lease payments (e.g., a change to future lease payments resulting from a change in an index or
rate) or a change in assessment of an option to purchase the underlying asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of
premises and employee dormitory (that is those leases that have a lease term of 12 months or less
from the commencement date and do not contain a purchase option). It also applies the recognition
exemption for leases of low-value assets that are considered to be of low value. Lease payments on
short-term leases and leases of low-value assets are recognised as an expense on a straight-line
basis over the lease term.
Group as a lessor
When the Group acts as a lessor, it classifies at lease inception (or when there is a lease
modification) each of its leases as either an operating lease or a finance lease.
Leases in which the Group does not transfer substantially all the risks and rewards incidental
to ownership of an asset are classified as operating leases. When a contract contains lease and
non-lease components, the Group allocates the consideration in the contract to each component on
a relative stand-alone selling price basis. Rental income is accounted for on a straight-line basis
over the lease terms and is included in revenue in profit or loss due to its operating nature. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income.
Contingent rents are recognised as revenue in the period in which they are earned.
Leases that transfer substantially all the risks and rewards incidental to ownership of an
underlying asset to the lessee are accounted for as finance leases.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 476 ---
When the Group is an intermediate lessor, a sublease is classified as a finance lease or
operating lease with reference to the right-of-use asset arising from the head lease. If the head
lease is a short-term lease to which the Group applies the on-balance sheet recognition exemption,
the Group classifies the sublease as an operating lease.
Investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised
cost, fair value through other comprehensive income and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them. With the
exception of trade receivables that do not contain a significant financing component or for which
the Group has applied the practical expedient of not adjusting the effect of a significant financing
component, the Group initially measures a financial asset at its fair value plus in the case of a
financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do
not contain a significant financing component or for which the Group has applied the practical
expedient are measured at the transaction price determined under IFRS 15 in accordance with the
policies set out for “Revenue recognition” below.
In order for a financial asset to be classified and measured at amortized cost or fair value
through other comprehensive income, it needs to give rise to cash flows that are solely payments
of principal and interest (“ SPPI”) on the principal amount outstanding. Financial assets with cash
flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective
of the business model.
The Group’s business model for managing financial assets refers to how it manages its
financial assets in order to generate cash flows. The business model determines whether cash flows
will result from collecting contractual cash flows, selling the financial assets, or both. Financial
assets classified and measured at amortised cost are held within a business model with the
objective to hold financial assets in order to collect contractual cash flows, while financial assets
classified and measured at fair value through other comprehensive income are held within a
business model with the objective of both holding to collect contractual cash flows and selling.
Financial assets which are not held within the aforementioned business models are classified and
measured at fair value through profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 477 ---
Purchases or sales of financial assets that require delivery of assets within the period
generally established by regulation or convention in the marketplace are recognised on the trade
date, that is, the date that the Group commits to purchase or sell the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest
method and are subject to impairment. Gains and losses are recognised in profit or loss when the
asset is derecognised, modified or impaired.
Financial assets at fair value through other comprehensive income (debt instruments)
For debt investments at fair value through other comprehensive income, interest income,
foreign exchange revaluation and impairment losses or reversals are recognised in profit or loss
and computed in the same manner as for financial assets measured at amortised cost. The
remaining far value changes are recognised in other comprehensive income. Upon derecognition,
the cumulative fair value change recognised in other comprehensive income is recycled to profit or
loss.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statements of financial
position at fair value with net changes in fair value recognised in profit or loss.
This category includes equity investments which the Group had not irrevocably elected to
classify at fair value through other comprehensive income. Dividends on the equity investments
are also recognised as other income in profit or loss when the right of payment has been
established.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement
of financial position) when:
 the rights to receive cash flows from the asset have expired; or
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 478 ---
 the Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third
party under a “pass-through” arrangement; and either (a) the Group has transferred
substantially all the risks and rewards of the asset, or (b) the Group has neither
transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and
rewards of ownership of the asset. When it has neither transferred nor retained substantially all the
risks and rewards of the asset nor transferred control of the asset, the Group continues to recognise
the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group
also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ ECLs”) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the difference between
the contractual cash flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original effective interest rate.
The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses that
result from default events that are possible within the next 12 months (a 12-month ECL). For those
credit exposures for which there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).
At the end of each of the Relevant Periods, the Group assesses whether the credit risk on a
financial instrument has increased significantly since initial recognition. When making the
assessment, the Group compares the risk of a default occurring on the financial instrument as at
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 479 ---
the end of each of the Relevant Periods with the risk of a default occurring on the financial
instrument as at the date of initial recognition and considers reasonable and supportable
information that is available without undue cost or effort, including historical and forward-looking
information.
The Group may also consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding contractual amounts in
full before taking into account any credit enhancements held by the Group.
A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
Debt investments at fair value through other comprehensive income and financial assets at
amortised cost are subject to impairment under the general approach and they are classified within
the following stages for measurement of ECLs except for trade receivables which apply the
simplified approach as detailed below.
Stage 1 Financial instruments for which credit risk has not increased significantly
since initial recognition and for which the loss allowance is measured at an
amount equal to 12-month ECLs
Stage 2 Financial instruments for which credit risk has increased significantly since
initial recognition but that are not credit-impaired financial assets and for
which the loss allowance is measured at an amount equal to lifetime ECLs
Stage 3 Financial assets that are credit-impaired at the Relevant Periods (but that are
not purchased or originated credit-impaired) and for which the loss allowance
is measured at an amount equal to lifetime ECLs
Simplified approach
For trade receivables that do not contain a significant financing component or when the
Group applies the practical expedient of not adjusting the effect of a significant financing
component, the Group applies the simplified approach in calculating ECLs. Under the simplified
approach, the Group does not track changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at the end of each of the Relevant Periods. The Group has established a
provision matrix that is based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 480 ---
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, loans and borrowings, or payables, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and bills payables, financial liabilities included
in other payables and accruals, and interest-bearing bank borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortised cost (trade and other payables, loans and borrowings)
After initial recognition, trade and other payables, and interest-bearing borrowings are
subsequently measured at amortised cost, using the effective interest rate method unless the effect
of discounting would be immaterial, in which case they are stated at cost. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the effective
interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the effective interest rate. The effective interest rate
amortisation is included in finance costs in profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires.
When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and a recognition
of a new liability, and the difference between the respective carrying amounts is recognised in
profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 481 ---
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the
statement of financial position if there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net basis, or to realise the assets and
settle the liabilities simultaneously.
Treasury shares
Own equity instruments which are reacquired and held by the Company (treasury shares) are
recognised directly in equity at cost and deducted from equity. No gain or loss is recognised in
profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments.
Any difference between the carrying amount and the consideration, if reissued, is recognised in the
capital reserve.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on
weighted average method and, in the case of work in progress and finished goods, comprises direct
materials, direct labour and an appropriate proportion of overheads. Net realisable value is based
on estimated selling prices less any estimated costs to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statements of financial position comprise cash on hand and
at banks, and short-term highly liquid deposits with a maturity of generally within three months
that are readily convertible into known amounts of cash, subject to an insignificant risk of changes
in value and held for the purpose of meeting short-term cash commitments.
For the purpose of the consolidated statements of cash flows, cash and cash equivalents
comprise cash on hand and at banks, and short-term deposits as defined above, less bank
overdrafts which are repayable on demand and form an integral part of the Group’s cash
management.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a
result of a past event and it is probable that a future outflow of resources will be required to settle
the obligation, provided that a reliable estimate can be made of the amount of the obligation.
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 482 ---
When the effect of discounting is material, the amount recognised for a provision is the
present value at the end of the reporting period of the future expenditures expected to be required
to settle the obligation. The increase in the discounted present value amount arising from the
passage of time is included in finance costs in profit or loss.
The Group provides for warranties in relation to the sale of products for general repairs of
defects occurring during the warranty period. Provisions for these assurance-type warranties
granted by the Group are initially recognised based on sales volume and past experience of the
level of repairs and returns, discounted to their present values as appropriate. The warranty-related
cost is revised annually. The provision for these assurance-type warranties is assessed to be
immaterial as at the end of each of the Relevant Periods based on historical data, current
conditions, and all relevant factors and market changes.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised
outside profit or loss is recognised outside profit or loss, either in other comprehensive income or
directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of each of the Relevant Periods, taking into consideration
interpretations and practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end
of each of the Relevant Periods between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
 when the deferred tax liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss and does not
give rise to equal taxable and deductible temporary differences; and
 in respect of taxable temporary differences associated with investments in subsidiaries,
associates and joint ventures, when the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 483 ---
Deferred tax assets are recognised for all deductible temporary differences, and the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be
utilised, except:
 when the deferred tax asset relating to the deductible temporary differences arises from
the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss and does not give rise to equal taxable and deductible temporary
differences; and
 in respect of deductible temporary differences associated with investments in
subsidiaries, associates and joint ventures, deferred tax assets are only recognised to the
extent that it is probable that the temporary differences will reverse in the foreseeable
future and taxable profit will be available against which the temporary differences can
be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each of the Relevant
Periods and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax
assets are reassessed at the end of each reporting period and are recognised to the extent that it has
become probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to
the period when the asset is realised or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the end of each of the Relevant Periods.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally
enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets
and deferred tax liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities which intend either to settle current tax
liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of deferred tax liabilities or assets are expected
to be settled or recovered.
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 484 ---
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the periods that the related costs, for
which it is intended to compensate, are expensed. When the grant relates to an asset, the fair value
is credited to a deferred income account and is released to the profit or loss over the expected
useful life of the related asset.
When the Group receives grants of non-monetary assets, the grant are recorded at nominal
amounts and released to profit or loss over the expected useful lives of the relevant assets by equal
annual instalments.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which the Group
expects to be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration
is estimated to which the Group will be entitled in exchange for transferring the goods or services
to the customer. The variable consideration is estimated at contract inception and constrained until
it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty with the variable consideration is
subsequently resolved.
(a) Sale of products
For domestic sales in Chinese Mainland, revenue is recognised at the point in time when
control of the products is transferred to customers in accordance with the contract term, generally
upon customers’ acceptance when the products are shipped to customers’ or their designated
locations, or upon the withdrawn of the products and confirm the usage by customers when the
products are shipped to customers’ manufacturing warehouses.
For cross-border sales, revenue is recognised at the point in time when control of the
products is transferred to the customer in accordance with the mutually agreed international
commerce term in the contract with customers, generally upon customers’ confirm on the
acceptance in bill of lading.
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 485 ---
(i) Rights of return
For contracts which provide a customer with a right to return the goods within a specified
period, the expected value method is used to estimate the goods that will not be returned because
this method best predicts the amount of variable consideration to which the Group will be entitled.
The requirements in IFRS 15 on constraining estimates of variable consideration are applied in
order to determine the amount of variable consideration that can be included in the transaction
price. For goods that are expected to be returned, instead of revenue, a refund liability is
recognised. A right-of-return asset (and the corresponding adjustment to cost of sales) is also
recognised for the right to recover products from a customer.
The Group generally does not accept sales returns except for limited reasons such as product
design defects or quality issues. The refund liabilities and right-of-return assets are assessed to be
immaterial at the end of each of the Relevant Periods based on historical data, current conditions,
and all relevant factors.
(b) Provision of technical services
Revenue from the provision of technical services is recognized at the point in time when the
technical services are rendered and accepted by the customers.
Revenue from other sources
Rental income is recognised on a time proportion basis over the lease terms.
Other income
Interest income is recognised on an accrual basis using the effective interest method by
applying the rate that exactly discounts the estimated future cash receipts over the expected life of
the financial instrument or a shorter period, when appropriate, to the net carrying amount of the
financial asset.
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever
is earlier) from a customer before the Group transfers the related goods or services. Contract
liabilities are recognised as revenue when the Group performs under the contract (i.e., transfers
control of the related goods or services to the customer).
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 486 ---
Share-based payments
The Group operates restricted share incentive plans and share option incentive plans for the
purpose of providing incentives and rewards to eligible participants who contribute to the success
of the Group’s operations. Employees (including directors) of the Group receive remuneration in
the form of share-based payments, whereby employees render services as consideration for equity
instruments (“ equity-settled transactions ”). The cost of equity-settled transactions with
employees is measured by reference to the fair value at the date on which they are granted. The
fair value of restricted share granted is determined by referring to the fair value of the Company’s
ordinary shares on the respective dates of grant. The fair value of share option granted is
determined by using a Black-Scholes model. Further details are included in note 33 to the
Historical Financial Information.
The cost of equity-settled transactions is recognised in employee benefit expense, together
with a corresponding increase in equity, over the period in which the performance and/or service
conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at the
end of each Relevant Periods until the vesting date reflects the extent to which the vesting period
has expired and the Group’s best estimate of the number of equity instruments that will ultimately
vest. The charge or credit to profit or loss for a period represents the movement in the cumulative
expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining
the grant date fair value of awards, but the likelihood of the conditions being met is assessed as
part of the Group’s best estimate of the number of equity instruments that will ultimately vest.
Market performance conditions are reflected within the grant date fair value. Any other conditions
attached to an award, but without an associated service requirement, are considered to be
non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead
to an immediate expensing of an award unless there are also service and/or performance
conditions.
For awards that do not ultimately vest because non-market performance and/or service
conditions have not been met, no expense is recognised. Where awards include a market or
non-vesting condition, the transactions are treated as vesting irrespective of whether the market or
non-vesting condition is satisfied, provided that all other performance and/or service conditions are
satisfied.
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 487 ---
Where the terms of an equity-settled share-based award are modified, as a minimum an
expense is recognised as if the terms had not been modified, if the original terms of the award are
met. In addition, an expense is recognised for any modification that increases the total fair value
of the share-based payments, or is otherwise beneficial to the employee as measured at the date of
modification.
Where an equity-settled share-based award is cancelled, it is treated as if it had vested on the
date of cancellation, and any expense not yet recognised for the award is recognised immediately.
This includes any award where non-vesting conditions within the control of either the Group or the
employee are not met. However, if a new award is substituted for the cancelled award, and is
designated as a replacement on the date that it is granted, the cancelled and new awards are treated
as if they were a modification of the original award, as described in the previous paragraph. The
dilutive effect of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
The dilutive effect of outstanding options and restricted shares is reflected as additional share
dilution in the computation of earnings per share. More details are disclosed in note 12 to the
Historical Financial Information.
Other employee benefits
Pension scheme
The employees of the Company and the Group’ subsidiaries which mainly operate in Chinese
Mainland are required to participate in a central pension scheme operated by the local municipal
government. These subsidiaries are required to contribute a certain percentage of their payroll
costs to the central pension scheme. The contributions are charged to profit or loss as they become
payable in accordance with the rules of the central pension scheme.
Housing fund and other social insurances — Chinese Mainland
The Group has participated in defined social security contribution schemes for its employees
pursuant to the relevant laws and regulations of the PRC. These include housing fund, basic
medical insurance, unemployment insurance, injury insurance and maternity insurance. The Group
makes monthly contributions to the housing fund and other social insurances. The contributions are
charged to profit or loss on an accrual basis. The Group’s liability in respect of these funds is
limited to the contributions payable in each of the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 488 ---
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such
borrowing costs ceases when the assets are substantially ready for their intended use or sale. All
other borrowing costs are expensed in the period in which they are incurred. Borrowing costs
consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Dividends
The Company’s dividends are recognised as liabilities upon approval by the shareholders’
general meeting. Final dividends are disclosed in note 11 to the Historical Financial Information.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional
currency. Each entity in the Group determines its own functional currency and items included in
the financial statements of each entity are measured using that functional currency. Foreign
currency transactions recorded by the entities in the Group are initially recorded using their
respective functional currency rates prevailing at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies are translated at the functional currency rates of
exchange ruling at the end of each of the Relevant Periods. Differences arising on settlement or
translation of monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was measured. The gain or loss arising on translation of a non-monetary item
measured at fair value is treated in line with the recognition of the gain or loss on change in fair
value of the item (i.e., translation difference on the item whose fair value gain or loss is
recognised in other comprehensive income or profit or loss is also recognised in other
comprehensive income or profit or loss, respectively).
In determining the exchange rate on initial recognition of the related asset, expense or income
on the derecognition of a non-monetary asset or non-monetary liability relating to an advance
consideration, the date of initial transaction is the date on which the Group initially recognises the
non-monetary asset or non-monetary liability arising from the advance consideration. If there are
multiple payments or receipts in advance, the Group determines the transaction date for each
payment or receipt of the advance consideration.
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 489 ---
The functional currencies of certain overseas subsidiaries, joint ventures and associates are
currencies other than the RMB. As at the end of the reporting period, the assets and liabilities of
these entities are translated into RMB at the exchange rates prevailing at the end of the reporting
period and their statements of profit or loss are translated into RMB at the exchange rates that
approximate to those prevailing at the dates of the transactions.
The resulting exchange differences are recognised in other comprehensive income and
accumulated in the exchange fluctuation reserve, except to the extent that the differences are
attributable to non-controlling interests. On disposal of a foreign operation, the cumulative amount
in the reserve relating to that particular foreign operation is recognised in profit or loss.
Events after the Relevant Periods
If the Group receives information after the Relevant Periods, but prior to the date of
authorisation for issue, about conditions that existed at the end of each of the Relevant Periods, it
will assess whether the information affects the amounts that it recognises in its financial
statements. The Group will adjust the amounts recognised in its Historical Financial Information to
reflect any adjusting events after the Relevant Periods and update the disclosures that relate to
those conditions in light of the new information. For non-adjusting events after the Relevant
Periods, the Group will not change the amounts recognised in its Historical Financial Information,
but will disclose the nature of the non-adjusting events and an estimate of their financial effects,
or a statement that such an estimate cannot be made, if applicable.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s Historical Financial Information requires management to
make judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and their accompanying disclosures, and the disclosure of
contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes
that could require a material adjustment to the carrying amounts of the assets or liabilities affected
in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the
following judgements, apart from those involving estimations, which have the most significant
effect on the amounts recognised in the Historical Financial Information:
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 490 ---
Business models
The classification of financial assets at initial recognition depends on the Group’s business
model for managing financial assets. When determining the business model, the Group considers
the methods used to evaluate and report financial asset performance to key management, the risks
affecting the performance of financial assets and the risk management, and the manner in which
the relevant management receives remuneration. When assessing whether the objective is to collect
contractual cash flows, the Group needs to analyse and judge the reason, timing, frequency and
value of the sale before the maturity date of the financial assets.
Development expenses
Expenditure incurred on projects to develop new products is capitalised and deferred only
when the Group can demonstrate the technical feasibility of completing the intangible asset so that
it will be available for use or sale, its intention to complete and its ability to use or sell the asset,
how the asset will generate future economic benefits, the availability of resources to complete the
project and the ability to measure reliably the expenditure during the development. Product
development expenditure which does not meet these criteria is expensed when incurred.
Determining the amounts of development costs to be capitalised requires the use of judgements
and estimation.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognised as
well as the tax rate that is expected to apply to the period when the liability is settled, based upon
the likely timing and level of future taxable profits together with future tax planning strategies.
Further details are given in note 29 to the Historical Financial Information.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at
the end of each of the Relevant Periods, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year, are
described below.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 491 ---
Share-based payment
The Group makes the best estimate of the number of exercisable equity instruments at the end
of each of the Relevant Periods during the vesting period based on the fair value on the grant date
and the latest subsequent information obtained, and includes the services obtained in the current
period in relevant costs or expenses. The fair value of the share option awards to employees is
determined by Black-Scholes Model at the date they are granted. Significant estimates on
assumptions, including the expected volatility, risk-free interest rate and expected life of options,
are made by the management of the Group. Further details are included in note 33 to the Historical
Financial Information.
Provision for expected credit losses on trade and other receivables
The Group makes allowances on trade and other receivables based on assumptions about risk
of default and expected loss rates. The Group uses estimations in making these assumptions and
selecting the inputs to the impairment calculation, based on the Group’s past history, existing
market conditions as well as forward looking estimates at the end of each reporting period.
The assessment of the correlation among historical observed default rates, forecast economic
conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in
circumstances and forecast economic conditions. The Group’s historical credit loss experience and
forecast of economic conditions may also not be representative of a customer’s actual default in
the future. The information about the ECLs on the Group’s trade receivables and other receivables
are disclosed in notes 20 and 22 to the Historical Financial Information.
Provision against obsolete and slow-moving inventories
The Group reviews the condition of its inventories and makes a provision against obsolete
and slow-moving inventory items which are identified as no longer suitable for sale or use.
Management estimates the net realisable value for such inventories based primarily on the latest
invoice prices and current market conditions. The Group carries out an inventory review at the end
of each of the Relevant Periods and makes a provision against obsolete and slow-moving items.
Management reassesses the estimation at the end of each of the Relevant Periods. The provision
against obsolete and slow-moving inventories requires the use of estimates. Where the expectation
is different from the original estimate, such difference will have an impact on the carrying value of
inventories and the write-down of inventory amount in the year in which such estimates have been
changed. Details of the Group’s inventory provision during the Relevant Periods is disclosed in
note 19 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 492 ---
Fair value of unlisted equity investments
The unlisted equity investments have been valued based on a market-based valuation
technique as detailed in note 39 to the Historical Financial Information. The valuation requires the
Group to determine the comparable public companies (peers) and select the price multiple. In
addition, the Group makes estimates about the discount for illiquidity and size differences. The
Group classifies the fair value of these investments as Level 2 and Level 3 during the Relevant
Periods. Further details are included in notes 18 and 39 to the Historical Financial Information.
Impairment of investment in associates and joint ventures
The Group determined whether there are indicators of impairment for investments in
associates and joint ventures at the end of each of the Relevant Periods. Indicators of impairment
included but not limited to serious deterioration of financial condition of the associate, adverse
changes in the industry market environment and other circumstances indicated that the associate
are unable to generate economic benefits for the Group. When such an indicator exists, the Group
tested its investments in associates and joint ventures for impairment by comparing the estimated
recoverable amounts with the carrying amounts. An impairment exists when the carrying value of
investments in associates and joint ventures exceeds their respective recoverable amount.
Useful lives of intangible assets
Amortisation is calculated on the straight-line basis to write off the cost of each item of
intangible asset to its residual value over its estimated useful life. The estimated useful lives
reflect the directors’ estimate of the periods that the Group intends to derive future economic
benefits from the use of the Group’s intangible assets.
Leases — Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in a lease, and therefore, it uses
an incremental borrowing rate (“ IBR”) to measure lease liabilities. The IBR is the rate of interest
that the Group would have to pay to borrow over a similar term, and with a similar security, the
funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group “would have to pay”, which requires
estimation when no observable rates are available (such as for subsidiaries that do not enter into
financing transactions) or when it needs to be adjusted to reflect the terms and conditions of the
lease (for example, when leases are not in the subsidiary’s functional currency). The Group
estimates the IBR using observable inputs (such as market interest rates) when available and is
required to make certain entity-specific estimates (such as the subsidiary’s standalone credit
rating).
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 493 ---
4. OPERATING SEGMENT INFORMATION
Management has determined the operating segment based on the information reviewed by the
Company’s chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segment.
Management monitors the results of the Company’s operating segment separately for the
purpose of making decisions about resource allocation and performance assessment, focuses on the
operating results of the Company as a whole as the Company’s resources are integrated and no
discrete operating segment information is available. Accordingly, no further information about the
operating segment is presented.
Geographical information
(a) Revenue from external customers
Revenues are attributed to geographical areas based on locations of the customers. Revenues
by geographical segment based on locations of the customers for the Relevant Period and nine
months ended 30 September 2024 are presented as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Geographical markets
Chinese Mainland ................. 1,760,368 1,482,375 2,138,448 1,613,043 1,858,424
East Asia (note) ................... 272,068 305,953 285,931 205,064 507,267
United States .................... 106,344 72,428 222,264 122,886 240,235
Europe ........................ 96,037 164,417 107,625 86,878 88,188
Others ........................ 71,115 122,163 187,106 154,157 127,174
Total ......................... 2,305,932 2,147,336 2,941,374 2,182,028 2,821,288
Note: not including Chinese Mainland.
(b) Non-current assets
Almost all the non-current assets of the Group are physically located in Chinese Mainland.
The non-current asset information is based on the locations of the assets and excludes financial
instruments and deferred tax assets.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 494 ---
Information about major customers
Information about external customers from which the revenue amounted to over 10% of the
total revenue of the Group during the Relevant Periods and nine months ended 30 September 2024
is as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Customer A ..................... * 521,769 955,098 600,018 796,093
* Less than 10% of the Group’s revenue
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts with customers
Wireless communication modules and
solutions .................... 2,227,999 2,048,987 2,808,563 2,085,672 2,738,538
Sales of electronic components ........ 64,075 87,379 123,279 88,072 82,750
Subtotal ....................... 2,292,074 2,136,366 2,931,842 2,173,744 2,821,288
Revenue from other sources
Gross rental income:
Other lease payments, including fixed
payments ................... 13,858 10,970 9,532 8,284 —
Total ......................... 2,305,932 2,147,336 2,941,374 2,182,028 2,821,288
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 495 ---
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Types of goods or services
Wireless communication modules and
solutions ...................... 2,227,999 2,048,987 2,808,563 2,085,672 2,738,538
Sales of electronic components ......... 64,075 87,379 123,279 88,072 82,750
Total ......................... 2,292,074 2,136,366 2,931,842 2,173,744 2,821,288
Geographical markets
Chinese Mainland ................. 1,746,510 1,471,405 2,128,916 1,604,759 1,858,225
East Asia (note) ................... 272,068 305,953 285,931 205,064 507,267
United States .................... 106,344 72,428 222,264 122,886 240,235
Europe ........................ 96,037 164,417 107,625 86,878 88,188
Others ........................ 71,115 122,163 187,106 154,157 127,373
Total ......................... 2,292,074 2,136,366 2,931,842 2,173,744 2,821,288
Timing of revenue recognition
Goods and services transferred at a point
in time ....................... 2,292,074 2,136,366 2,931,842 2,173,744 2,821,288
Total ......................... 2,292,074 2,136,366 2,931,842 2,173,744 2,821,288
Note: not including Chinese Mainland.
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 496 ---
The following table shows the amounts of revenue recognised in the Relevant Periods that
were included in the contract liabilities at the beginning of each of the Relevant Periods and
recognised from performance obligations satisfied in previous periods:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue recognised that was included in
contract liabilities at the beginning of the
reporting period:
Wireless communication modules and
solutions .................... 73,778 67,451 52,328 52,328 109,344
(b) Performance obligations
Information about the Group’s performance obligations is summarized below:
Sale of products
For domestic sales in Chinese Mainland, the performance obligation is normally satisfied
upon the customers’ acceptance. For certain manufacturing customers, the performance obligation
is satisfied upon the withdrawn of the products and confirm the usage by customers. For
cross-border sales, the performance obligation is normally satisfied upon customers’ confirm on
the acceptance in bill of lading.
The payment is generally due within 30 to 90 days from the date of delivery, whereby
payment is extended to 120 days for certain major customers. Advanced payment is required for
new customers.
Provision of technical services
Revenue from the provision of technical services is recognized when the Group has satisfied
the corresponding performance obligation and the services are accepted by the customers. The
payment is generally due within 30 days upon customers’ acceptance.
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 497 ---
All amounts of transaction prices allocated to the performance obligations for sale of wireless
communication modules and solutions are expected to be recognised as revenue within one year.
The Group has no significant unsatisfied performance obligations arising from revenue contracts
that have an original expected duration of more than one year. Thus, management applied the
practical expedient under IFRS 15 and is not disclosing the aggregate amount of the transaction
price allocated to the performance obligations that are unsatisfied or partially satisfied at the end
of each of the Relevant Periods.
Other income and gains
An analysis of other income and gains is as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Other income
Interest income ................... 1,076 4,276 2,497 1,928 2,169
Government grants* ................ 24,782 17,477 10,696 8,829 16,272
Total other income ................. 25,858 21,753 13,193 10,757 18,441
Gains
Gain on early termination of a lease ...... — — 78 78 —
Gain on sublease of right-of-use assets
(note 15) ..................... ———— 9 8 9
Gains on equity investments at FVTPL .... 43,875 25,371 1,725 — —
Gain on deemed disposal of a subsidiary
(note 32) ..................... — — 4,906 — —
Foreign exchange gains, net ........... — — — — 8,518
Others ........................ — 14 113 1,094 —
Total gains ...................... 43,875 25,385 6,822 1,172 9,507
69,733 47,138 20,015 11,929 27,948
* The government grants mainly represent subsidies received from the government that are relating to both income
and assets.
These government grants related to income were awarded for the Group’s contribution to the local economic growth
and reimbursed for the Group’s R&D expenditures. These grants related to income are recognised in profit or loss
upon receipt and there are no unfulfilled conditions or contingencies relating to these grants.
The Group has also received certain government grants related to assets, which were recognised as deferred income
upon receipt and released to profit or loss over the expected useful life of the relevant asset, when all attaching
conditions and requirements are compliant with.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 498 ---
6. PROFIT BEFORE TAX
The Group’s profit before tax is arrived at after charging/(crediting):
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cost of sales* .................... 1,900,557 1,751,198 2,456,712 1,837,399 2,464,709
Research and development costs:
— Deferred expenditure amortised* ..... 3,740 9,296 14,690 10,785 11,519
— Current year expenditures .......... 185,909 213,877 208,136 148,287 153,125
Depreciation of property, plant and
equipment** .................... 13 6,670 6,198 6,137 4,920 4,079
Depreciation of right-of-use assets** ...... 15 19,040 16,934 14,647 12,004 5,594
Amortisation of other intangible assets** ... 14 15,652 30,748 38,287 29,072 28,361
Loss on disposal of items of property, plant
and equipment*** ................ 26 84 13 8 9
Loss/(gain) on early termination of a
lease*** ...................... — 105 (78) (78) —
Gain on sublease of right-of-use assets *** .. 15 — — — — (989)
Gain on deemed disposal of a subsidiary*** . 32 — — (4,906) — —
Foreign exchange losses/(gains), net*** .... 6,756 6,115 28,472 16,727 (8,518)
Expenses relating to short-term leases ..... 15 1,714 1,967 1,970 1,050 55
Impairment/(reversal of impairment) of trade
and bills receivables ............... 20 5,361 13,594 (7,638) (12,056) (5,040)
Impairment of other receivables ......... 22 1,957 637 1,082 856 (1,256)
(Gains)/losses on equity investments at
FVTPL*** ..................... (43,875) (25,371) (1,725) — 1,165
Share of profits and losses of joint ventures .. 16 618 511 860 580 568
Share of profits and losses of an associate ... 17 5,279 5,570 11,986 8,364 5,927
Auditor’s remuneration ............... 700 600 600 — —
Listing expenses ................... ———— 7 6 7
Write-down of inventories to net realisable
value* ....................... 19 6,362 15,216 16,342 9,986 13,984
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 499 ---
Y ear ended 31 December
Nine months ended
30 September
Notes 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Employee benefit expenses (excluding
directors’, supervisors’ and chief
executive’s remuneration
(note 8)) :
— Wages and salaries .............. 214,642 226,363 215,761 151,986 153,421
— Pension scheme contributions ....... 17,343 19,196 18,704 13,467 14,135
— Share-based payments expenses ...... 7,345 2,386 11,118 5,537 16,535
Total employee benefit expenses ......... 239,330 247,945 245,583 170,990 184,091
* Write-down of inventories to net realisable value and deferred expenditure amortised are included in “Cost of sales”
in the consolidated statement of profit or loss and other comprehensive income.
** The depreciation of property, plant and equipment, amortisation of other intangible assets, and depreciation of
right-of-use assets during the Relevant Periods are included in “Cost of sales”, “Selling and marketing expenses”,
“Administrative expenses” and “Research and development expenses” in the consolidated statement of profit or loss
and other comprehensive income, respectively.
*** The amounts are included in “Other income and gains” and “Other expense” in the consolidated statement of profit
or loss and other comprehensive income.
7. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on bank loans and other borrowings . 12,128 6,968 5,456 4,350 6,976
Interest on lease liabilities ............ 1,758 1,676 841 701 372
Total ......................... 13,886 8,644 6,297 5,051 7,348
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 500 ---
8. DIRECTORS’, SUPERVISORS’ AND CHIEF EXECUTIVE’S REMUNERATION
Directors’, supervisors’ and chief executive’s remuneration during the Relevant Periods and
nine months ended 30 September 2024, is set out as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Fees .......................... 200 200 250 176 226
Other emoluments:
Salaries, bonuses, allowances and benefits
in kind ..................... 4,884 5,152 5,439 3,507 2,424
Pension scheme contributions ......... 128 129 131 96 91
Share-based payment expenses ........ 1,110 391 — — —
Subtotal ....................... 6,122 5,672 5,570 3,603 2,515
Total ......................... 6,322 5,872 5,820 3,779 2,741
During the Relevant Periods, certain directors were granted share options and share awards,
in respect of their services to the Group, under the share option incentive plan and restricted share
incentive plan of the Group, further details of which are included in the disclosures in note 33 to
the Historical Financial Information. The fair value of such share options and restricted share
awards, which has been recognised in profit or loss over the vesting period, was determined as at
the date of grant and the amount included in the Historical Financial Information for the Relevant
Periods and nine months ended 30 September 2024 is included in the above remuneration
disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 501 ---
(a) Independent non-executive directors
The independent non-executive directors’ fees during the Relevant Periods and nine months
ended 30 September 2024 were as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Mr. YANG Zheng ................. 100 100 125 88 113
Dr. MA Lijun .................... 100 100 125 88 113
Ms. LIU Jia (note) ................. —————
Total ......................... 200 200 250 176 226
Note: Ms. LIU Jia was appointed as the Company’s independent non-executive director on 5 June 2025.
There were no other emoluments payable to the independent non-executive directors during
the Relevant Periods and nine months ended 30 September 2024.
(b) Executive directors, supervisors and the chief executive
Fees
Salaries,
bonuses,
allowances and
benefits in kind
Pension scheme
contributions
Share-based
payment expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2022
Executive director and chief
executive:
Mr. WANG Ping ........ — 1,293 22 — 1,315
Mr. DU Guobin ......... — 1,295 28 757 2,080
Mr. XIA Youqing ........ — 824 17 202 1,043
Mr. HUANG Min ........ — 621 17 151 789
— 4,033 84 1,110 5,227
Supervisor:
Mr. NING Huan ........ — 507 19 — 526
Mr. NING Jian ......... — 220 15 — 235
Ms. FU Zhiyi .......... — 124 10 — 134
— 851 44 — 895
— 4,884 128 1,110 6,122
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 502 ---
Fees
Salaries,
bonuses,
allowances and
benefits in kind
Pension scheme
contributions
Share-based
payment expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2023
Executive director and chief
executive:
Mr. WANG Ping ........ — 1,733 21 — 1,754
Mr. DU Guobin ......... — 1,210 30 267 1,507
Mr. XIA Youqing ........ — 821 17 71 909
Mr. HUANG Min ........ — 648 17 53 718
— 4,412 85 391 4,888
Supervisor:
Mr. NING Huan ........ — 377 19 — 396
Mr. NING Jian ......... — 221 15 — 236
Ms. FU Zhiyi .......... — 142 10 — 152
— 740 44 — 784
— 5,152 129 391 5,672
Fees
Salaries,
bonuses,
allowances and
benefits in kind
Pension scheme
contributions
Share-based
payment expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Y ear ended 31 December 2024
Executive director and chief
executive:
Mr. WANG Ping ........ — 1,747 22 — 1,769
Mr. DU Guobin ......... — 1,360 31 — 1,391
Mr. XIA Youqing ........ — 912 17 — 929
Mr. HUANG Min ........ — 653 17 — 670
— 4,672 87 — 4,759
Supervisor:
Mr. NING Huan ........ — 373 19 — 392
Mr. NING Jian ......... — 236 11 — 247
Ms. FU Zhiyi .......... — 158 14 — 172
— 767 44 — 811
— 5,439 131 — 5,570
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 503 ---
Fees
Salaries,
bonuses,
allowances and
benefits in kind
Pension scheme
contributions
Share-based
payment expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Nine months ended
30 September 2025
Executive director and chief
executive:
Mr. WANG Ping ........ — 598 17 — 615
Mr. DU Guobin ......... — 601 24 — 625
Mr. XIA Youqing ........ — 461 13 — 474
Mr. HUANG Min ........ — 384 13 — 397
— 2,044 67 — 2,111
Supervisor:*
Mr. NING Huan ........ — 190 10 — 200
Mr. NING Jian ......... —1 1 3 6 — 1 1 9
Ms. FU Zhiyi .......... —7 7 8 — 8 5
— 380 24 — 404
— 2,424 91 — 2,515
* The Company had dissolved the supervisory committee from July 2025. Therefore, the supervisors’ remuneration
for the nine months ended 30 September 2025 presented above only include remuneration from January 2025 to
June 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 504 ---
Fees
Salaries,
bonuses,
allowances and
benefits in kind
Pension scheme
contributions
Share-based
payment expenses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Nine months ended 30
September 2024 (unaudited)
Executive director and chief
executive:
Mr. WANG Ping ........ — 1,548 16 — 1,564
Mr. DU Guobin ......... — 600 23 — 623
Mr. XIA Youqing ........ — 460 12 — 472
Mr. HUANG Min ........ — 382 12 — 394
— 2,990 63 — 3,053
Supervisor:
Mr. NING Huan ........ — 248 15 — 263
Mr. NING Jian ......... — 162 8 — 170
Ms. FU Zhiyi .......... — 107 10 — 117
— 517 33 — 550
— 3,507 96 — 3,603
Note: There was no arrangement under which the executive directors, supervisors and the chief executive waived or
agreed to waive any remuneration during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 505 ---
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the year ended 31 December 2022, 2023 and 2024
and nine months ended 30 September 2024 and 2025 included three, three, two, two and nil
directors, respectively, details of whose remuneration are set out in note 8 above. Details of the
remuneration for the remaining two, two, three, three and five highest paid employees who are
neither a director nor chief executive of the Company during the year ended 31 December 2022,
2023 and 2024 and nine months ended 30 September 2024 and 2025:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, bonuses, allowances and benefits in
kind ........................ 1,788 1,803 2,759 1,442 2,590
Pension scheme contributions .......... 55 59 92 68 102
Share-based payment expenses .......... 1,402 494 1,680 840 3,078
3,245 2,356 4,531 2,350 5,770
The number of non-director and non-chief executive highest paid employees whose
remuneration fell within the following bands is as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
Numbers of employees
HK$500,000 to HK$1,000,000 .......... ——— 3 1
HK$1,000,001 to HK$1,500,000 ......... —2 — —4
HK$1,500,001 to HK$2,000,000 ......... 2— 3——
22335
During the Relevant Periods, certain non-director and non-chief executive highest paid
employees were granted share options and share awards, in respect of their services to the Group,
under the share option incentive plan and restricted share incentive plan of the Group, further
details of which are included in the disclosures in note 33 to the Historical Financial Information.
The fair value of such share options and restricted share awards, which has been recognised in
profit or loss over the vesting period, was determined as at the date of grant and the amount
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 506 ---
included in the Historical Financial Information during the Relevant Periods and nine months
ended 30 September 2024 is included in the above non-director and non-chief executive highest
paid employees’ remuneration disclosures.
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from
the jurisdictions in which members of the Group are domiciled and operate.
Chinese Mainland
The provision for corporate income tax in Chinese Mainland is based on the statutory rate of
25% of the taxable profits determined in accordance with the PRC Corporate Income Tax Law
which was approved and became effective on 1 January 2008 except for those subject to
preferential tax set out below.
The Company was qualified as a “High and New Technology Enterprise” (“ HNTE”) and
entitled to a preferential income tax rate of 15% for the years ended 31 December 2022 and 2023
and nine months ended 30 September 2024. The Company does not entitled to the preferential tax
rate of 15% in 2024 as the Company does not meet certain criteria of HNTE, and the provision of
the Company’s corporate income tax is calculated based on the statutory rate of 25% during the
year ended 31 December 2024 and nine months ended 30 September 2025.
Xi’an ZhaoGe, ZhongGe Shanghai and MeiG Zhilian were qualified as HNTE and were
entitled to a preferential income tax rate of 15% during the Relevant Periods and nine months
ended 30 September 2024. This qualification is subject to review and approval by the relevant tax
authority in the PRC for every three years.
ZhongGe Nantong, the Group’s subsidiary established in June 2024, was qualified as a Small
and Low-Profit Enterprises (SLPE) and was subject to a preferential income tax rate of 5% for the
year ended 31 December 2024 and nine months ended 30 September 2024 and 2025.
Xi’an ZhaoGe and ZhongGe Shanghai are entitled to a three-year CIT exemption followed by
a three-year 50% CIT reduction from the first profit-making year. Starting from the first
income-generating year, the entities are entitled to a two-year of CIT exemption followed by a
three-year 50% CIT reduction during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 507 ---
Hong Kong
During the Relevant Periods and nine months ended 30 September 2024, the first
HK$2,000,000 of assessable profits of the Group’s Hong Kong subsidiary are taxed at 8.25% and
the remaining assessable profits are taxed at 16.5%.
Germany
The Company’s subsidiary incorporated in Germany is subject to Germany profits tax at the
statutory rate of 15% on any estimated assessable profits arising in Germany during the Relevant
Periods and nine months ended 30 September 2024.
France
The Company’s subsidiary incorporated in France is subject to France profits tax at the
statutory rate of 15% on any estimated assessable profits arising in France during the Relevant
Periods and nine months ended 30 September 2024.
Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in
the jurisdictions in which the Group operates.
The income tax charge/(credit) of the Group for the Relevant Periods and nine months ended
30 September 2024 is analysed as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current income tax ................. 6,142 12,657 26,678 22,895 9,155
Deferred income tax (note 29) .......... 16,828 (12,139) (36,912) (18,854) (185)
Total tax charge/(credit) .............. 22,970 518 (10,234) 4,041 8,970
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 508 ---
A reconciliation of the income tax charge/(credit) applicable to profit before tax at the
preferential tax rate for the jurisdiction in which the Company and the majority of its subsidiaries
are domiciled to the tax expense at the effective tax rate is as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit before tax .................. 149,585 63,127 124,141 94,539 122,140
Tax charge at the preferential tax rate of
15% ........................ 22,438 9,469 18,621 14,181 18,321
Effect of different applicable tax rates for
specific jurisdictions or enacted by local
authority ...................... 4,814 1,312 (718) 12 (4,314)
Adjustments in respect of current tax of
previous periods ................. (160) 11,570 284 217 925
Expenses not deductible for tax ......... 1,503 876 1,830 701 2,565
Profits and losses attributable to joint
ventures and associates*** ........... 885 912 3,161 1,342 1,559
Deductible temporary differences and tax
losses not recognised .............. 1,236 2,516 2,031 1,060 1,478
Additional deductible allowance for qualified
research and development expenses* ..... (22,466) (25,640) (22,012) (13,472) (11,564)
Deductible temporary differences and/or tax
losses utilised from previous periods .... — (497) — — —
Effect on opening deferred tax of increase in
rates** ....................... 14,564 — (13,442) — —
Others ........................ 156 — 11 — —
Income tax charge/(credit) at the Group’s
effective tax rate ................ 22,970 518 (10,234) 4,041 8,970
* Based on Public Notice 2021 No. 13 issued by the State Tax Bureau of the PRC on 31 March 2021, the
manufacturing enterprises were eligible for an additional 100% deduction of eligible R&D expenses starting from 1
January 2021. Furthermore, based on Public Notice 2023 No. 7 issued by the State Tax Bureau of the PRC on 26
March 2023, the enterprises were eligible for an additional 100% deduction of eligible R&D expenses from 1
January 2023. The Group has claimed such additional deduction during the Relevant Periods and nine months
ended 30 September 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 509 ---
** The Company and its subsidiary MeiG Zhilian obtained were accredited as HNTE and entitled to a preferential
income tax rate of 15% for the years ended 31 December 2022, the PRC CIT tax rate applicable to the Company
was reduced from 25% to 15% in 2022. The Company failed to enjoy the preferential tax rate of 15% in 2024
because of its business indicators not meeting the stipulation of HNTE, the PRC CIT tax rate applicable to the
Company was increased from 15% to 25% in 2024.
*** The share of tax attributable to associates of RMB1,760,000, RMB1,857,000, RMB3,995,000, RMB1,976,000 and
RMB2,788,000 during the Relevant Periods and nine months ended 30 September 2024, respectively, are included
in “Share of profits and losses of associates” in the consolidated statement of profit or loss and other
comprehensive income. The share of tax attributable to joint ventures of RMB191,000, RMB173,000, RMB271,000,
RMB177,000 and RMB183,000 during the Relevant Periods and nine months ended 30 September 2024,
respectively, are included in “Share of profits and losses of joint ventures” in the consolidated statement of profit or
loss and other comprehensive income.
11. DIVIDENDS
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Cash dividends ................... 24,811 25,890 25,802 25,802 33,929
The final dividends of RMB1.36, RMB1.0, RMB1.0 and RMB1.3 per 10 shares (tax
inclusive) in respect of the years ended 31 December 2021, 2022, 2023 and 2024 were approved
by the Annual General Meeting of the Company.
The final dividend distribution of RMB24,811,000 in respect of the year ended 31 December
2021 approved by the Company’s Annual General Meeting on 19 May 2022 was subsequently paid
in 2022.
The final dividend distribution of RMB25,890,000 in respect of the year ended 31 December
2022 approved by the Company’s Annual General Meeting on 17 May 2023 was subsequently paid
in 2023.
The final dividend distribution of RMB25,802,000 in respect of the year ended 31 December
2023 approved by the Company’s Annual General Meeting on 16 May 2024 was subsequently paid
in 2024.
The final dividend distribution of RMB33,929,000 in respect of the year ended 31 December
2024 approved by the Company’s Annual General Meeting on 19 May 2025 was subsequently paid
in 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 510 ---
12. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF
THE PARENT
The calculation of the basic earnings per share amounts is based on the profit attributable to
ordinary equity holders of the parent and the weighted average number of ordinary shares in issue
(excluding treasury shares) during the Relevant Periods and nine months ended 30 September
2024.
The weighted average number of ordinary shares outstanding for the Relevant Periods and
nine months ended 30 September 2024 presented has been retrospectively adjusted for the effect of
the increase in paid-in capital as a result of the transfer from capital reserve to share capital in
2022.
The calculation of the diluted earnings per share amounts for the years ended 31 December
2022, 2023 and 2024 and the nine months ended 30 September 2024 and 2025 is based on the
profit for the year/period attributable to ordinary equity holders of the parent. The weighted
average number of ordinary shares used in the calculation is the number of ordinary shares
outstanding during the year/period, as used in the basic earnings per share calculation, and the
weighted average number of ordinary shares assumed to have been issued at no consideration on
the deemed exercise or conversion of all dilutive potential ordinary shares into ordinary shares.
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
Earnings
Profit attributable to ordinary equity holders
of the parent, used in the basic and diluted
earnings per share calculation (RMB’000) . 127,836 64,509 135,572 91,356 113,035
Shares
Weighted average number of ordinary shares
in issue during the year, used in the basic
earnings per share calculation ........ 237,033,496 260,145,192 260,522,025 260,590,136 261,775,332
Effect of dilution — weighted average
number of ordinary shares:
Restricted share awards and share options ... 976,983 62,964 680,385 326,832 1,057,459
Total ......................... 238,010,479 260,208,156 261,202,410 260,916,968 262,832,791
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 511 ---
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost .............. 4,521 5,833 5,458 26,508 2,978 45,298
Accumulated
depreciation ....... (1,374) (3,563) (3,651) (7,939) (1,903) (18,430)
Net carrying amount .. 3,147 2,270 1,807 18,569 1,075 26,868
At 1 January 2022, net
of accumulated
depreciation ........ 3,147 2,270 1,807 18,569 1,075 26,868
Additions ............ — — — 4,852 717 5,569
Depreciation provided
during the year ...... (203) (454) (488) (5,009) (1,152) (7,306)
Disposal ............. — (21) — (5) — (26)
At 31 December 2022,
net of accumulated
depreciation ........ 2,944 1,795 1,319 18,407 640 25,105
At 31 December 2022:
Cost .............. 4,521 5,689 5,458 31,311 3,695 50,674
Accumulated
depreciation ....... (1,577) (3,894) (4,139) (12,904) (3,055) (25,569)
Net carrying amount .. 2,944 1,795 1,319 18,407 640 25,105
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 512 ---
The Group
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost .............. 4,521 5,689 5,458 31,311 3,695 50,674
Accumulated
depreciation ....... (1,577) (3,894) (4,139) (12,904) (3,055) (25,569)
Net carrying amount .. 2,944 1,795 1,319 18,407 640 25,105
At 1 January 2023, net
of accumulated
depreciation ........ 2,944 1,795 1,319 18,407 640 25,105
Additions ............ — 4 404 3,173 85 3,666
Depreciation provided
during the year ...... (203) (431) (494) (5,541) (312) (6,981)
Disposal ............. — (36) (35) (37) — (108)
At 31 December 2023,
net of accumulated
depreciation ........ 2,741 1,332 1,194 16,002 413 21,682
At 31 December 2023:
Cost .............. 4,521 5,340 5,508 34,219 3,780 53,368
Accumulated
depreciation ....... (1,780) (4,008) (4,314) (18,217) (3,367) (31,686)
Net carrying amount .. 2,741 1,332 1,194 16,002 413 21,682
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 513 ---
The Group
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost .............. 4,521 5,340 5,508 34,219 3,780 53,368
Accumulated
depreciation ...... (1,780) (4,008) (4,314) (18,217) (3,367) (31,686)
Net carrying amount .. 2,741 1,332 1,194 16,002 413 21,682
At 1 January 2024, net
of accumulated
depreciation ........ 2,741 1,332 1,194 16,002 413 21,682
Additions ............ — — 807 2,130 179 3,116
Depreciation provided
during the year ...... (203) (93) (244) (6,002) (328) (6,870)
Disposal ............. — — — (18) — (18)
Other ............... — — — (25) — (25)
At 31 December 2024,
net of accumulated
depreciation ........ 2,538 1,239 1,757 12,087 264 17,885
At 31 December 2024:
Cost .............. 4,521 5,340 6,315 36,127 3,959 56,262
Accumulated
depreciation ...... (1,983) (4,101) (4,558) (24,040) (3,695) (38,377)
Net carrying amount .. 2,538 1,239 1,757 12,087 264 17,885
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 514 ---
Buildings
Machinery
and
equipment
Motor
vehicles
Electronic
equipment
and others
Leasehold
improvements Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 September 2025
At 1 January 2025:
Cost .............. 4,521 5,340 6,315 36,127 3,959 56,262
Accumulated
depreciation ...... (1,983) (4,101) (4,558) (24,040) (3,695) (38,377)
Net carrying amount .. 2,538 1,239 1,757 12,087 264 17,885
At 1 January 2025, net
of accumulated
depreciation ........ 2,538 1,239 1,757 12,087 264 17,885
Additions ............ — — — 3,197 — 3,197
Depreciation provided
during the period .... (153) (50) (150) (3,805) (146) (4,304)
Disposal ............. — — — (10) — (10)
At 30 September 2025,
net of accumulated
depreciation ....... 2,385 1,189 1,607 11,469 118 16,768
At 30 September 2025:
Cost .............. 4,521 5,340 6,315 39,236 3,959 59,371
Accumulated
depreciation ...... (2,136) (4,151) (4,708) (27,767) (3,841) (42,603)
Net carrying amount .. 2,385 1,189 1,607 11,469 118 16,768
Notes:
(a) As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group had not obtained building ownership
certificates for all buildings with a net book value of approximately RMB2,944,000, RMB2,741,000,
RMB2,538,000 and RMB2,385,000, respectively.
(b) During the year ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025,
depreciation of property, plant and equipment of RMB6,670,000, RMB6,198,000, RMB6,137,000 and
RMB4,079,000 were included in the consolidated statements of profit or loss and other comprehensive income, and
the remaining amount of RMB636,000, RMB783,000, RMB733,000 and RMB225,000 were capitalised in other
intangible assets, respectively.
(c) As at 31 December 2022, 2023 and 2024 and 30 September 2025, there were no items of the Group’s property,
plant and equipment that were pledged, and no impairment was provided on the Group’s property, plant and
equipment.
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 515 ---
The Company
Buildings
Machinery and
equipment Motor vehicles
Electronic
equipment and
others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost ............. 4,521 5,594 4,971 3,307 18,393
Accumulated
depreciation ...... (1,374) (3,549) (3,629) (1,550) (10,102)
Net carrying amount . 3,147 2,045 1,342 1,757 8,291
At 1 January 2022, net
of accumulated
depreciation ....... 3,147 2,045 1,342 1,757 8,291
Additions ........... — — — 104 104
Depreciation provided
during the year ..... (203) (411) (400) (444) (1,458)
Disposal ............ — (21) — (4) (25)
At 31 December 2022,
net of accumulated
depreciation ....... 2,944 1,613 942 1,413 6,912
At 31 December 2022:
Cost ............. 4,521 5,450 4,971 3,366 18,308
Accumulated
depreciation ...... (1,577) (3,837) (4,029) (1,953) (11,396)
Net carrying amount . 2,944 1,613 942 1,413 6,912
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 516 ---
Buildings
Machinery and
equipment Motor vehicles
Electronic
equipment and
others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost ............. 4,521 5,450 4,971 3,366 18,308
Accumulated
depreciation ...... (1,577) (3,837) (4,029) (1,953) (11,396)
Net carrying amount . 2,944 1,613 942 1,413 6,912
At 1 January 2023, net
of accumulated
depreciation ....... 2,944 1,613 942 1,413 6,912
Additions ........... — — 404 2 406
Depreciation provided
during the year ..... (203) (387) (407) (430) (1,427)
Disposal ............ — (940) (36) (655) (1,631)
At 31 December 2023,
net of accumulated
depreciation ....... 2,741 286 903 330 4,260
At 31 December 2023:
Cost ............. 4,521 1,436 5,021 1,538 12,516
Accumulated
depreciation ...... (1,780) (1,150) (4,118) (1,208) (8,256)
Net carrying amount . 2,741 286 903 330 4,260
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 517 ---
Buildings
Machinery and
equipment Motor vehicles
Electronic
equipment and
others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024:
Cost ............. 4,521 1,436 5,021 1,538 12,516
Accumulated
depreciation ...... (1,780) (1,150) (4,118) (1,208) (8,256)
Net carrying amount . 2,741 286 903 330 4,260
At 1 January 2024, net
of accumulated
depreciation ....... 2,741 286 903 330 4,260
Additions ........... — — — 93 93
Depreciation provided
during the year ..... (203) (53) (101) (94) (451)
Disposal ............ ——— ( 5 ) ( 5 )
At 31 December 2024,
net of accumulated
depreciation ....... 2,538 233 802 324 3,897
At 31 December 2024:
Cost ............. 4,521 1,436 5,021 1,582 12,560
Accumulated
depreciation ...... (1,983) (1,203) (4,219) (1,258) (8,663)
Net carrying amount . 2,538 233 802 324 3,897
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 518 ---
Buildings
Machinery and
equipment Motor vehicles
Electronic
equipment and
others Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
30 September 2025
At 1 January 2025:
Cost ............. 4,521 1,436 5,021 1,582 12,560
Accumulated
depreciation ...... (1,983) (1,203) (4,219) (1,258) (8,663)
Net carrying amount . 2,538 233 802 324 3,897
At 1 January 2025, net
of accumulated
depreciation ....... 2,538 233 802 324 3,897
Additions ........... — — — 1,920 1,920
Depreciation provided
during the period ... (153) (34) (27) (99) (313)
Disposal ............ ——— ( 5 ) ( 5 )
At 30 September 2025,
net of accumulated
depreciation ....... 2,385 199 775 2,140 5,499
At 30 September 2025:
Cost ............. 4,521 1,436 5,021 3,457 14,435
Accumulated
depreciation ...... (2,136) (1,237) (4,246) (1,317) (8,936)
Net carrying amount . 2,385 199 775 2,140 5,499
Notes:
(a) As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Company had not obtained building
ownership certificates for buildings with a net book value of approximately RMB2,944,000, RMB2,741,000,
RMB2,538,000 and RMB2,385,000, respectively.
(b) As at 31 December 2022, 2023 and 2024 and 30 September 2025, there were no items of the Company’s property,
plant and equipment that were pledged, and no impairment was provided on the Company’s property, plant and
equipment.
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 519 ---
14. OTHER INTANGIBLE ASSETS
The Group
Software License rights Total
RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022
Cost ............................. 19,208 57,724 76,932
Accumulated amortisation ............ (6,879) (21,453) (28,332)
Net carrying amount ................ 12,329 36,271 48,600
At 1 January 2022, net of accumulated
amortisation ....................... 12,329 36,271 48,600
Additions, including internal development .. 23,219 19,279 42,498
Amortisation provided during the year .... (4,144) (11,508) (15,652)
At 31 December 2022, net of accumulated
amortisation ....................... 31,404 44,042 75,446
At 31 December 2022
Cost ............................. 42,427 77,003 119,430
Accumulated amortisation ............ (11,023) (32,961) (43,984)
Net carrying amount ................ 31,404 44,042 75,446
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 520 ---
Software License rights Total
RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023
Cost ............................. 42,427 77,003 119,430
Accumulated amortisation ............ (11,023) (32,961) (43,984)
Net carrying amount ................ 31,404 44,042 75,446
At 1 January 2023, net of accumulated
amortisation ....................... 31,404 44,042 75,446
Additions, including internal development .. 21,779 52,190 73,969
Amortisation provided during the year .... (9,487) (21,261) (30,748)
At 31 December 2023, net of accumulated
amortisation ....................... 43,696 74,971 118,667
At 31 December 2023
Cost ............................. 64,206 129,193 193,399
Accumulated amortisation ............ (20,510) (54,222) (74,732)
Net carrying amount ................ 43,696 74,971 118,667
Software License rights Total
RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024
Cost ............................. 64,206 129,193 193,399
Accumulated amortisation ............ (20,510) (54,222) (74,732)
Net carrying amount ................ 43,696 74,971 118,667
At 1 January 2024, net of accumulated
amortisation ....................... 43,696 74,971 118,667
Additions, including internal development .. 19,676 9,022 28,698
Amortisation provided during the year .... (14,812) (23,475) (38,287)
At 31 December 2024 , net of accumulated
amortisation ....................... 48,560 60,518 109,078
At 31 December 2024
Cost ............................. 83,882 138,215 222,097
Accumulated amortisation ............ (35,322) (77,697) (113,019)
Net carrying amount ................ 48,560 60,518 109,078
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 521 ---
Software License rights Total
RMB’000 RMB’000 RMB’000
30 September 2025
At 1 January 2025
Cost ............................. 83,882 138,215 222,097
Accumulated amortisation ............ (35,322) (77,697) (113,019)
Net carrying amount ................ 48,560 60,518 109,078
At 1 January 2025, net of accumulated
amortisation ....................... 48,560 60,518 109,078
Additions, including internal development . 7,945 16,804 24,749
Amortisation provided during the period ... (11,611) (17,488) (29,099)
At 30 September 2025 , net of accumulated
amortisation ....................... 44,894 59,834 104,728
At 30 September 2025
Cost ............................ 91,827 155,019 246,846
Accumulated amortisation ............ (46,933) (95,185) (142,118)
Net carrying amount ................ 44,894 59,834 104,728
Note:
(a) During the year ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025,
amortization of other intangible assets of RMB15,652,000, RMB30,748,000, RMB38,287,000 and RMB28,361,000
were included in the consolidated statements of profit or loss and other comprehensive income, and the remaining
amount of nil, nil, nil and RMB738,000 were capitalised, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 522 ---
The Company
Software License rights Total
RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022
Cost ............................. 3,865 57,724 61,589
Accumulated amortisation ............ (3,325) (21,453) (24,778)
Net carrying amount ................ 540 36,271 36,811
At 1 January 2022, net of accumulated
amortisation ....................... 540 36,271 36,811
Additions .......................... 219 19,279 19,498
Amortisation provided during the year .... (404) (11,508) (11,912)
At 31 December 2022 , net of accumulated
amortisation ....................... 355 44,042 44,397
At 31 December 2022
Cost ............................. 4,084 77,003 81,087
Accumulated amortisation ............ (3,729) (32,961) (36,690)
Net carrying amount ................ 355 44,042 44,397
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 523 ---
Software License rights Total
RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023
Cost ............................. 4,084 77,003 81,087
Accumulated amortisation ............ (3,729) (32,961) (36,690)
Net carrying amount ................ 355 44,042 44,397
At 1 January 2023, net of accumulated
amortisation ....................... 355 44,042 44,397
Additions .......................... — 52,190 52,190
Amortisation provided during the year .... (191) (20,928) (21,119)
Transfer to subsidiaries ................ — (10,679) (10,679)
At 31 December 2023, net of accumulated
amortisation ....................... 164 64,625 64,789
At 31 December 2023
Cost ............................. 4,084 109,269 113,353
Accumulated amortisation ............ (3,920) (44,644) (48,564)
Net carrying amount ................ 164 64,625 64,789
Software License rights Total
RMB’000 RMB’000 RMB’000
31 December 2024
At 1 January 2024
Cost ............................. 4,084 109,269 113,353
Accumulated amortisation ............ (3,920) (44,644) (48,564)
Net carrying amount ................ 164 64,625 64,789
At 1 January 2024, net of accumulated
amortisation ....................... 164 64,625 64,789
Additions .......................... — 4,094 4,094
Amortisation provided during the year .... (122) (17,156) (17,278)
Transfer to subsidiaries ................ — (13,111) (13,111)
At 31 December 2024, net of accumulated
amortisation ....................... 42 38,452 38,494
At 31 December 2024
Cost ............................. 4,084 100,030 104,114
Accumulated amortisation ............ (4,042) (61,578) (65,620)
Net carrying amount ................ 42 38,452 38,494
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 524 ---
Software License rights Total
RMB’000 RMB’000 RMB’000
30 September 2025
At 1 January 2025
Cost ............................. 4,084 100,030 104,114
Accumulated amortisation ............ (4,042) (61,578) (65,620)
Net carrying amount ................ 42 38,452 38,494
At 1 January 2025, net of accumulated
amortisation ....................... 42 38,452 38,494
Amortisation provided during the period ... (42) (10,742) (10,784)
At 30 September 2025, net of accumulated
amortisation ...................... — 27,710 27,710
At 30 September 2025
Cost ............................. 4,084 100,030 104,114
Accumulated amortisation ............ (4,084) (72,320) (76,404)
Net carrying amount ................ — 27,710 27,710
15. LEASES
The Group as a lessee
The Group has lease contracts for various items of buildings and premises used in operations.
Leases of buildings and premises generally have lease terms between 2 and 9 years.
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 525 ---
(a) Right-of-use assets
The carrying amounts of right-of-use assets and the movements during the Relevant Periods
are as follows:
Buildings and
premises
RMB’000
At 1 January 2022 ................................................ 38,218
Additions ...................................................... 21,722
Depreciation charge ............................................... (19,040)
At 31 December 2022 ............................................. 40,900
At 1 January 2023 ................................................ 40,900
Additions ...................................................... 1,217
Depreciation charge ............................................... (16,934)
Early termination of a lease ........................................ (1,146)
At 31 December 2023 ............................................. 24,037
At 1 January 2024 ................................................ 24,037
Additions ...................................................... 946
Depreciation charge ............................................... (14,647)
Early termination of a lease ........................................ (931)
At 31 December 2024 ............................................. 9,405
At 1 January 2025 ................................................ 9,405
Additions ...................................................... 7,826
Depreciation charge ............................................... (5,594)
Sublease of right-of-use assets* ..................................... (4,662)
At 30 September 2025 ............................................. 6,975
* The Group subleased certain of its right-of-use assets to third parties. As the lease period is approximately the same
as the lease period of the head lease, the sublease was classified as a finance lease under IFRS 16. The Group
derecognised the right-of-use assets relating to the head lease that it transfers to the sublease and recognised the
receivables from sublease of the right-of-use assets that constituted finance lease (note 22), resulting a gain from
the sublease transaction amounted to RMB989,000 for the nine months ended 30 September 2025, which is
included in the consolidated financial statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 526 ---
(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during the Relevant Periods are
as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year/period ................. 40,630 43,886 25,770 10,009
New leases ..................... 21,722 1,217 946 7,826
Accretion of interest recognised
during the year/period ........... 1,758 1,676 841 372
Early termination of a lease ........ — (1,041) (1,009) —
Lease payments .................. (20,224) (19,968) (16,539) (8,049)
Carrying amount at the end of the
year/period .................... 43,886 25,770 10,009 10,158
Analysed into:
Current portion ................ 16,808 16,470 8,592 6,288
Non-current portion ............. 27,078 9,300 1,417 3,870
Total .......................... 43,886 25,770 10,009 10,158
The maturity analysis of lease liabilities is disclosed in note 40 to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 527 ---
(c) The amounts recognised in profit or loss in relation to leases are as follows:
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Expenses relating to short-term leases . 1,714 1,967 1,970 55
Interest on lease liabilities .......... 1,758 1,676 841 372
Depreciation charge of right-of-use
assets ........................ 19,040 16,934 14,647 5,594
Losses/(gains) on early termination of
a lease ....................... — 105 (78) —
Gains on sublease of right-of-use
assets ........................ — — — (989)
Total amount recognised in profit or
loss ......................... 22,512 20,682 17,380 5,032
(d) The total cash outflow for leases are disclosed in notes 34(c) to the Historical Financial
Information.
The Company as a lessee
The Company has lease contracts for various items of buildings and premises used in
operations. Leases of buildings and premises generally have lease terms between 2 and 9 years.
APPENDIX I ACCOUNTANTS’ REPORT
– I-83 –


--- page 528 ---
(a) Right-of-use assets
The carrying amounts of right-of-use assets and the movements during the Relevant Periods
are as follows:
Buildings and
premises
RMB’000
At 1 January 2022 ................................................ 34,147
Depreciation charge ............................................... (12,239)
At 31 December 2022 ............................................. 21,908
At 1 January 2023 ................................................ 21,908
Depreciation charge ............................................... (9,284)
At 31 December 2023 ............................................. 12,624
At 1 January 2024 ................................................ 12,624
Depreciation charge ............................................... (7,962)
At 31 December 2024 ............................................. 4,662
At 1 January 2025 ................................................ 4,662
Sublease of right-of-use assets* ..................................... (4,662)
At 30 September 2025 ............................................. —
* The Company subleased certain of its right-of-use assets to third parties. As the lease period is approximately the
same as the lease period of the head lease, the sublease was classified as a finance lease under IFRS 16. The
Company derecognised the right-of-use assets relating to the head lease that it transfers to the sublease and
recognised the receivables from sublease of the right-of-use assets that constituted finance lease (note 22), resulting
a gain from the sublease transaction amounted to RMB989,000 for the nine months ended 30 September 2025,
which is included in the consolidated financial statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-84 –


--- page 529 ---
(b) Lease liabilities
The carrying amounts of lease liabilities and the movements during the Relevant Periods are
as follows:
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year/period ................. 36,853 25,160 15,124 5,651
Accretion of interest recognised
during the year/period ........... 1,425 921 451 136
Lease payments .................. (13,118) (10,957) (9,924) (3,735)
Carrying amount at the end of the
year/period .................... 25,160 15,124 5,651 2,052
Analysed into:
Current portion ................ 10,036 9,068 4,826 2,052
Non-current portion ............. 15,124 6,056 825 —
Total .......................... 25,160 15,124 5,651 2,052
(c) The amounts recognised in profit or loss in relation to leases are as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Interest on lease liabilities .......... 1,425 921 451 136
Gains on sublease of right-of-use
assets ....................... — — — (989)
Depreciation charge of right-of-use
assets ........................ 12,239 9,284 7,962 —
Total amount recognised in profit or
loss ......................... 13,664 10,205 8,413 (853)
APPENDIX I ACCOUNTANTS’ REPORT
– I-85 –


--- page 530 ---
16. INVESTMENT IN JOINT VENTURES
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets ............... 2,399 1,888 1,479 2,260
The Group’s trade receivable and payable balances with joint ventures are disclosed in notes
37 to the Historical Financial Information.
At 31 December 2022, 2023 and 2024 and 30 September 2025, particulars of the Group’s
joint ventures are as follows:
Name
Particulars of issued
shares held
Place of
incorporation/
registration and
business
Percentage of
Principal activity
Ownership
interest
Voting
power
Profit
sharing
MeiLink Co., Ltd
(ٟMeiLink) .
Registered capital of
JPY1 each
Japan 50% 50% 50% Sales and
supply chain
Guangzhou Liandong
Gezhi Technology
Co., Ltd. ( ᄿψᑌᏑ
ʮ̡ )
(“Liandong Gezhi ”).
Registered capital of
RMB1 each
PRC/Chinese
Mainland
45% 45% 45% Manufacture
In the opinion of the directors, no investments in joint ventures are material to the Group and
the Company.
APPENDIX I ACCOUNTANTS’ REPORT
– I-86 –


--- page 531 ---
The following table illustrates the aggregate financial information of the Group’s joint
ventures which are not individually material:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of the joint ventures’ losses for
the year/period ................. (618) (511) (860) (568)
Share of the joint ventures’ total
comprehensive losses ............ (618) (511) (860) (568)
Aggregate carrying amount of the
Group’s investments in the joint
ventures at the end of the
year/period .................... 2,399 1,888 1,479 2,260
The above investments are held by the Company or held through consolidated entities of the
Company. They are joint ventures of the Group as the decisions about the relevant activities of the
entities require the unanimous consent of the shareholders.
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets ............... 748 156 257 1,451
At 31 December 2022, 2023 and 2024 and 30 September 2025, particulars of the Company’s
joint venture is as follows:
Name
Particulars of issued
shares held
Place of
incorporation/
registration and
business
Percentage of
Principal activity
Ownership
interest
Voting
power
Profit
sharing
LianDong Gezhi ..... Registered capital of
RMB1 each
PRC/Chinese
Mainland
45% 45% 45% Manufacture
APPENDIX I ACCOUNTANTS’ REPORT
– I-87 –


--- page 532 ---
The above investment is held by the Company. It is a joint venture of the Company as the
decisions about the relevant activities of the entities require the unanimous consent of the
shareholders.
The following table illustrates the financial information of the Company’s joint venture:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of the joint venture’s loss for
the year/period ................. (152) (592) (349) (155)
Share of the joint venture’s total
comprehensive loss ............. (152) (592) (349) (155)
Carrying amount of the Company’s
investments in the joint venture at
the end of the year/period ........ 748 156 257 1,451
17. INVESTMENT IN ASSOCIATES
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets ............... 63,663 58,168 46,181 54,583
The Group’s trade receivable and payable balances with associates are disclosed in notes 37
to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-88 –


--- page 533 ---
At 31 December 2022, 2023 and 2024 and 30 September 2025, particulars of the Group’s
associates are as follows:
Name
Particulars of issued
shares held
Place of incorporation/
registration and business
Percentage of
ownership
interest
attributable to
the Group Principal activity
ShuoGe Intelligent Technology
Co., Ltd. (ʮ
̡)( “ ShuoGe Intelligent ”) ...
Registered capital of
RMB1 each
PRC/Chinese
Mainland
36.0% Manufacture and sales
Pinsu Zhilian* ............ Registered capital of
RMB1 each
PRC/Chinese
Mainland
37.5% Manufacture and sales
Sigbeat Inc .............. Registered capital of
USD0.001 each
USA 40.0% Sales
* In 2024, one investor increased its shareholding interest in Pinsu Zhilian, the then subsidiary of the Company, by
making addition capital injection to Pinsu Zhilian. Upon the completion of the capital injection, the Company lose
control over Pinsu Zhilian, the Group’s investment in Pinsu Zhilian was subsequently accounted as the Group’s
associate since the Group is assessed to have significant influence on the operations and finance of Pinsu Zhilian.
More details are given in note 32 to the Historical Financial Information.
In the opinion of the directors, no investments in associates are material to the Group and the
Company.
The following table illustrates the aggregate financial information of the Group’s associates
that is not individually material:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of the associate’ loss for the
year/period .................... (5,279) (5,570) (11,986) (5,927)
Share of the associate’ total
comprehensive loss ............. (5,279) (5,570) (11,986) (5,927)
Aggregate carrying amount of the
Group’s investments in the associate
at the end of the year/period ...... 63,663 58,168 46,181 54,583
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 534 ---
17. INVESTMENT IN ASSOCIATES
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets ............... 63,739 58,168 46,181 40,348
At 31 December 2022, 2023 and 2024 and 30 September 2025, particulars of the Company’s
associates are as follows:
Name
Particulars of issued
shares held
Place of incorporation/
registration and business
Percentage of
ownership
interest
attributable to
the Group Principal activity
ShuoGe Intelligent ..... Registered capital
of RMB1 each
PRC/Chinese
Mainland
36% Manufacture and sales
18. EQUITY INVESTMENTS AT FAIR V ALUE THROUGH PROFIT AND LOSS
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted equity investments,
at fair value ................... 198,875 234,246 189,971 176,137
The above equity investments were classified as financial assets at fair value through profit
or loss as the Group has not elected to recognise the fair value gain or loss through other
comprehensive income.
APPENDIX I ACCOUNTANTS’ REPORT
– I-90 –


--- page 535 ---
19. INVENTORIES
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials ................... 366,710 387,637 387,127 574,480
Finished goods .................. 49,361 50,131 70,616 99,004
Goods in transit .................. 23,590 37,152 113,192 49,987
Work in process ................. 24,485 22,087 29,608 52,967
Contract performance cost .......... 26,240 29,312 50,009 35,718
Total .......................... 490,386 526,319 650,552 812,156
As at 31 December 2022, 2023, 2024 and 30 September 2025, the Group’s inventories were
stated at the lower of cost and net realisable value, and the movement in the provision was as
follows:
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year/period ................. 15,143 16,219 26,266 33,807
Impairment losses recognised, net .... 6,362 15,216 16,342 13,984
Write-off ....................... (5,286) (5,169) (8,801) (8,331)
Carrying amount at the end of the
year/period .................... 16,219 26,266 33,807 39,460
APPENDIX I ACCOUNTANTS’ REPORT
– I-91 –


--- page 536 ---
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials ................... 363,775 387,466 373,466 511,295
Finished goods .................. 43,371 45,268 72,004 94,608
Goods in transit .................. 22,745 33,595 63,609 38,822
Work in process ................. 24,485 20,884 27,890 44,246
Total .......................... 454,376 487,213 536,969 688,971
As at 31 December 2022, 2023, 2024 and 30 September 2025, the Company’s inventories
were stated at the lower of cost and net realisable value, and the movement in the provision was as
follows:
Y ear ended 31 December
Nine months
ended 30
September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning of
the year/period ................. 15,123 15,683 24,499 33,648
Impairment losses recognised, net .... 5,846 13,739 16,094 13,934
Write-off ....................... (5,286) (4,923) (6,945) (8,305)
Carrying amount at the end of the
year/period .................... 15,683 24,499 33,648 39,277
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 537 ---
20. TRADE AND BILLS RECEIV ABLES
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivables*
Bank acceptance bills:
Third parties ................. 3,444 3,446 2,283 20,292
Commercial acceptance bills:
Third parties ................. 39 — 5,833 —
Less: impairment of bills receivables . 2— 1 1 7—
Bills receivables, net .............. 3,481 3,446 7,999 20,292
Trade receivables:
Third parties .................... 514,671 759,120 1,101,709 810,620
Due from related parties ........... — 8,307 10,053 29,279
Less: impairment of trade receivables . 97,851 111,447 103,692 98,769
Trade receivables, net ............. 416,820 655,980 1,008,070 741,130
Total trade and bills receivables ..... 420,301 659,426 1,016,069 761,422
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


--- page 538 ---
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills receivables*
Bank acceptance bills:
Third parties ................. 3,151 3,374 2,081 20,292
Commercial acceptance bills:
Due from subsidiaries ......... — — 230,000 —
Third parties ................. — — 5,833 —
Less: impairment of bills receivables . —— 1 1 7—
Bills receivables, net .............. 3,151 3,374 237,797 20,292
Trade receivables:
Third parties .................... 322,694 265,931 303,309 346,128
Due from related parties ........... — — 10,053 10,379
Due from subsidiaries ............. 336,022 639,751 636,217 418,167
Less: impairment of trade receivables . 86,280 83,734 82,552 84,874
Trade receivables, net ............. 572,436 821,948 867,027 689,800
Total trade and bills receivables ..... 575,587 825,322 1,104,824 710,092
* Bills receivables are with a maturity period of within six months.
The Group’s trade terms with the majority of customers are on credit, except for certain new
and oversea customers where payment in advance is normally required. The credit period is
generally within 30 to 180 days. Each customer has a maximum credit limit. The Group seeks to
maintain strict control over its outstanding receivables and has a credit control department to
minimise credit risk. Overdue balances are reviewed regularly by senior management. The Group
does not hold any collateral or other credit enhancements over its trade receivable balances. Trade
and bills receivables are non-interest-bearing.
As at the end of each of the Relevant Periods, the Group had certain concentrations of credit
risk. As at 31 December 2022, 2023 and 2024 and 30 September 2025, 17.7%, 43.3%, 60.0% and
24.2%, respectively, of the Group’s trade receivables were due from the Group’s largest debtor,
and 49.6%, 57.8%, 69.0% and 47.4%, respectively, of the Group’s trade receivables were due from
the Group’s five largest debtors.
APPENDIX I ACCOUNTANTS’ REPORT
– I-94 –


--- page 539 ---
Included in the Group’s trade receivables are amounts due from the Group’s joint ventures
and associates of nil, RMB7,891,000, RMB9,736,000 and RMB28,524,000 as at 31 December
2022, 2023 and 2024 and 30 September 2025, respectively, which are repayable on credit terms
similar to those offered to the major customers of the Group (note 37).
An ageing analysis of the trade and bills receivables as at the end of each of the Relevant
Periods, based on the invoice date and net of loss allowance, is as follows:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 6 months ................. 370,182 599,801 964,576 671,783
7 months to 1 year ............... 4,896 12,200 6,662 43,447
1 year to 2 years ................. 943 2,482 2,465 4,976
2 years to 3 years ................ 1,440 742 1,375 444
3 years to 4 years ................ 42,840 1,361 538 538
4 years to 5 years ................ — 42,840 1,249 1,249
Over 5 years .................... — — 39,204 38,985
Total .......................... 420,301 659,426 1,016,069 761,422
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 6 months ................. 542,523 787,857 1,070,965 640,705
7 months to 1 year ............... 4,696 8,666 6,657 39,843
1 year to 2 years ................. 95 552 1,229 3,964
2 years to 3 years ................ 1,440 53 302 428
3 years to 4 years ................ 26,833 1,361 — —
4 years to 5 years ................ — 26,833 1,249 1,249
Over 5 years .................... — — 24,422 23,903
Total .......................... 575,587 825,322 1,104,824 710,092
APPENDIX I ACCOUNTANTS’ REPORT
– I-95 –


--- page 540 ---
The movements in the loss allowance for impairment of trade and bills receivables are as
follows:
The Group
31 December 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ........ 92,492 97,853 111,447 103,809
Impairment losses, net ............. 5,361 13,594 (7,638) (5,040)
At end of year/period ............. 97,853 111,447 103,809 98,769
The Company
31 December 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period ........ 88,598 86,280 83,734 82,669
Impairment losses, net ............. (2,318) (2,546) (1,065) 2,205
At end of year/period ............. 86,280 83,734 82,669 84,874
The Group applies the simplified approach in calculating ECLs for trade and bills
receivables. Trade receivables relating to customers with known financial difficulties or significant
doubt on collection are assessed individually for impairment allowance. The remaining trade
receivables are grouped and collectively assessed for impairment allowance. Under the simplified
approach, an impairment analysis is performed at the end of each of Relevant Periods using a
provision matrix to measure expected credit losses. The provision rates are based on days past due
for groupings of various customer segments with similar loss patterns. The calculation reflects the
probability-weighted outcome, the time value of money and reasonable and supportable
information that is available at the Relevant Periods about past events, current conditions and
forecasts of future economic conditions.
APPENDIX I ACCOUNTANTS’ REPORT
– I-96 –


--- page 541 ---
Set out below is the information about the credit risk exposure on the Group’s trade and bills
receivables:
The Group
At 31 December 2022
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed ............... 117,633 59% 69,309
On a collective basis:
Within 6 months ................... 386,317 5% 19,315
7 months to 1 year .................. 4,876 5% 244
1 year to 2 years ................... 294 10% 29
2 years to 3 years .................. 157 50% 79
3 years to 4 years .................. 3,257 100% 3,257
4 years to 5 years .................. 5,326 100% 5,326
Over 5 years ...................... 293 100% 293
518,153 19% 97,852
At 31 December 2023
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed ............... 131,876 54% 70,754
On a collective basis:
Within 6 months ................... 617,295 5% 30,865
7 months to 1 year .................. 9,888 5% 494
1 year to 2 years ................... 2,694 10% 269
2 years to 3 years .................. 109 50% 54
3 years to 4 years .................. 143 100% 143
4 years to 5 years .................. 153 100% 153
Over 5 years ...................... 8,714 100% 8,714
770,872 14% 111,446
APPENDIX I ACCOUNTANTS’ REPORT
– I-97 –


--- page 542 ---
At 31 December 2024
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed ............... 117,136 63% 73,307
On a collective basis:
Within 6 months ................... 981,694 2% 19,634
7 months to 1 year .................. 7,002 5% 350
1 year to 2 years ................... 2,450 10% 245
2 years to 3 years .................. 2,646 50% 1,323
3 years to 4 years .................. 76 100% 76
4 years to 5 years .................. 45 100% 45
Over 5 years ...................... 8,828 100% 8,828
1,119,877 9% 103,808
At 30 September 2025
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed .............. 114,148 64% 73,308
On a collective basis:
Within 6 months ................... 685,081 2% 13,296
7 months to 1 year ................. 45,733 5% 2,287
1 year to 2 years .................. 5,529 10% 553
2 years to 3 years .................. 751 50% 376
3 years to 4 years .................. 76 100% 76
4 years to 5 years .................. 45 100% 45
Over 5 years ...................... 8,828 100% 8,828
860,191 11% 98,769
APPENDIX I ACCOUNTANTS’ REPORT
– I-98 –


--- page 543 ---
The Company
At 31 December 2022
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed ............... 97,710 68% 66,364
(ii) Due from subsidiaries ............ 336,022 0% —
On a collective basis:
Within 6 months ................... 214,120 5% 10,706
7 months to 1 year .................. 4,876 5% 244
1 year to 2 years ................... 106 10% 11
2 years to 3 years .................. 157 50% 79
3 years to 4 years .................. 3,257 100% 3,257
4 years to 5 years .................. 5,326 100% 5,326
Over 5 years ...................... 293 100% 293
661,867 13% 86,280
At 31 December 2023
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed ............... 101,171 68% 66,692
(ii) Due from subsidiaries ............ 639,751 0% —
On a collective basis:
Within 6 months ................... 152,298 5% 7,615
7 months to 1 year .................. 6,169 5% 308
1 year to 2 years ................... 550 10% 55
2 years to 3 years .................. 106 50% 53
3 years to 4 years .................. 143 100% 143
4 years to 5 years .................. 153 100% 153
Over 5 years ...................... 8,714 100% 8,714
909,055 9% 83,733
APPENDIX I ACCOUNTANTS’ REPORT
– I-99 –


--- page 544 ---
At 31 December 2024
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed ............... 96,674 73% 68,967
(ii) Due from subsidiaries ............ 866,217 0% —
On a collective basis:
Within 6 months ................... 206,801 2% 4,019
7 months to 1 year .................. 6,998 5% 350
1 year to 2 years ................... 1,354 10% 135
2 years to 3 years .................. 501 50% 250
3 years to 4 years .................. 74 100% 74
4 years to 5 years .................. 45 100% 45
Over 5 years ...................... 8,828 100% 8,828
1,187,492 7% 82,668
At 30 September 2025
Gross carrying
amount
Expected credit
loss rate
Expected credit
losses
RMB’000 RMB’000
On an individual basis:
(i) Individual assessed ............... 94,122 73% 68,902
(ii) Due from subsidiaries ............ 438,459 0% —
On a collective basis:
Within 6 months ................... 206,374 2% 4,128
7 months to 1 year ................. 41,940 5% 2,097
1 year to 2 years ................... 4,405 10% 440
2 years to 3 years .................. 719 50% 360
3 years to 4 years .................. 74 100% 74
4 years to 5 years .................. 45 100% 45
Over 5 years ...................... 8,828 100% 8,828
794,966 11% 84,874
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 545 ---
21. DEBT INVESTMENTS AT FAIR V ALUE THROUGH OTHER COMPREHENSIVE
INCOME
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank acceptance bills ............. 5,122 38,427 9,992 26,739
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bank acceptance bills ............. 2,965 34,136 8,012 14,538
The above bank acceptance bills are issued by reputable banks in Chinese Mainland. They are
classified and measured at fair value through other comprehensive income as they are held within
a business model with the objective of both collecting contractual cashflows and selling. The fair
value as at the end of each of the Relevant Periods approximates to the carrying value due to the
short maturity. Bank acceptance bills is subject to impairment under the general approach and the
impairment is considered to be minimal.
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 546 ---
22. PREPAYMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Value-added tax recoverable ........ 21,923 58,732 75,170 114,018
Prepaid income tax .............. 1,211 1,712 1 1,052
Rebate receivable from a supplier ... 175,239 147,068 154,232 246,710
Other assets ..................... 1 , 4 5 6———
Deferred listing expenses .......... — — — 13,046
Deferred mould cost .............. 1,202 186 — —
Prepayments .................... 52,371 15,909 16,780 64,700
Other receivables ................ 35,620 30,038 30,426 33,123
Impairment of other receivables ..... (21,973) (21,915) (22,806) (21,546)
Other receivables, net ............. 13,647 8,123 7,620 11,577
Due from related parties ........... 1,738 1,737 1,059 1,602
Impairment of related parties ........ (174) (869) (740) (743)
Due from related parties, net (note 37) 1,564 868 319 859
Current portion of receivables from
sublease of right-of-use assets
(note 15) .................... — — — 2,055
268,613 232,598 254,122 454,017
Non-current
Prepayments for property, plant and
equipment .................... 4 5 0———
Prepayments for other intangible
assets ........................ — 1,002 849 1,584
Prepayments for other non-current
assets ........................ — 2,092 2,025 2,025
Non-current portion of other
receivables ................... — — — 1,590
Development expenditure .......... 5,386 12,922 7,705 9,321
Deferred expenses ................ 899 3,354 4,598 7,770
Deferred mould cost .............. 2,958 1,820 1,359 1,692
9,693 21,190 16,536 23,982
APPENDIX I ACCOUNTANTS’ REPORT
– I-102 –


--- page 547 ---
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current
Value-added tax recoverable ........ 14,189 46,400 64,725 109,695
Prepaid income tax .............. 1,211 473 — 382
Rebate receivable from a supplier .... 40,294 — 64,029 246,710
Other assets ..................... 2,591 186 — —
Deferred listing expenses .......... — — — 13,046
Prepayments .................... 24,959 21,722 14,838 101,539
Other receivables ................ 30,753 25,462 26,586 30,774
Impairment of other receivables ..... (19,501) (18,884) (19,395) (19,495)
Other receivables, net ............. 11,252 6,578 7,191 11,279
Due from related parties .......... 1,738 1,737 1,059 1,602
Impairment of related parties ........ (174) (869) (740) (743)
Due from related parties, net
(note 37) ..................... 1,564 868 319 859
Due from subsidiaries ............. 65,050 75,050 38,050 27,050
Current portion of sublease of
right-of-use assets .............. — — — 2,055
161,110 151,277 189,152 512,615
Non-current
Prepayments for other intangible
assets ........................ — 1,002 849 1,584
Prepayments for other non-current
assets ........................ — 2,092 2,025 2,025
Deferred expenses ................ 899 3,354 4,598 7,770
Deferred mould cost .............. 2,958 1,820 1,359 1,692
3,857 8,268 8,831 13,071
Other receivables are unsecured and non-interest-bearing.
APPENDIX I ACCOUNTANTS’ REPORT
– I-103 –


--- page 548 ---
As of 31 December 2022, 2023, 2024 and 30 September 2025, the impairment of the other
receivables is estimated by applying the general approach under IFRS9. The Group consider the
historical loss rate and adjusted it to reflect the current situations and forecasts of future economic
conditions, as appropriate, in calculating the expected credit loss rate. Other receivables relating to
counterparties with significant doubt on collection are assessed individually for impairment
allowance. As of 31 December 2022, 2023, 2024 and 30 September 2025, amounts of
RMB773,000, RMB773,000, RMB1,134,000 and RMB1,134,000 were provided for the default
other receivables for which the counterparty has individually credit risk, amounts of
RMB17,558,000, RMB17,558,000, RMB17,558,000 and RMB17,558,000 were provided for the
default other receivables for which the counterparties failed to make the demanded payments.
The movements in the loss allowance for impairment of other receivables are as follows:
The Group
31 December 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of the year/period ...... 20,190 22,147 22,784 23,545
Impairment losses, net ............. 1,957 637 1,082 (1,256)
Disposal of a subsidiary ........... — — (321) —
At the end of the year/period ....... 22,147 22,784 23,545 22,289
The Company
31 December 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of the year/period ...... 18,948 19,675 19,753 20,134
Impairment losses, net ............. 727 78 381 104
At the end of the year/period ....... 19,675 19,753 20,134 20,238
APPENDIX I ACCOUNTANTS’ REPORT
– I-104 –


--- page 549 ---
23. CASH AND CASH EQUIV ALENTS AND RESTRICTED CASH
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances ........... 85,115 148,510 349,877 321,194
Less: restricted cash .............. 12,828 9,584 7,998 5,340
Cash and cash equivalents .......... 72,287 138,926 341,879 315,854
Denominated in
RMB .......................... 26,802 96,025 187,141 148,234
USD .......................... 43,820 30,434 122,415 157,036
EUR .......................... 1,484 12,280 32,292 10,570
GBP .......................... 134 145 — —
HKD .......................... 47 42 31 14
72,287 138,926 341,879 315,854
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash and bank balances ........... 47,721 68,307 249,720 171,872
Less: restricted cash .............. 12,828 9,584 7,998 5,340
Cash and cash equivalents .......... 34,893 58,723 241,722 166,532
Denominated in
RMB .......................... 12,770 42,978 128,095 44,660
USD .......................... 22,123 15,745 113,627 121,872
34,893 58,723 241,722 166,532
APPENDIX I ACCOUNTANTS’ REPORT
– I-105 –


--- page 550 ---
Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank
balances and restricted cash are deposited with creditworthy banks with no recent history of
default. As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group and the
Company have assessed the credit risk of cash and cash equivalents, restricted cash to be minimal
as they were placed in reputable financial institutions.
As at 30 September 2025, the restricted cash represented the balances restricted for the use of
share repurchase and cash guaranteed for the use of issuing bank notes. As at 31 December 2024,
the restricted cash represented the balances restricted for the use of share repurchase. As at 31
December 2023 and 2022, the restricted cash represented cash guaranteed for the use of issuing
bank notes.
The RMB is not freely convertible into other currencies, however, under Chinese Mainland’s
Foreign Exchange Control Regulations and Administration of Settlement, and Sale and Payment of
Foreign Exchange Regulations, the Group is permitted to exchange RMB for other currencies
through banks authorised to conduct foreign exchange business.
24. TRADE AND BILLS PAYABLES
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills payables
Due to third parties ............. 42,207 36,631 — 17,621
Trade payables
Due to third parties ............. 277,768 442,205 574,033 547,938
Due to related parties (note 37) .... 11,409 7,044 5,883 5,547
Total .......................... 331,384 485,880 579,916 571,106
APPENDIX I ACCOUNTANTS’ REPORT
– I-106 –


--- page 551 ---
An ageing analysis of the trade and bills payables as at the end of each of the Relevant
Periods, based on the invoice date, is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year ................... 328,133 482,003 554,495 560,168
Over 1 year ..................... 3,251 3,877 25,421 10,938
Total .......................... 331,384 485,880 579,916 571,106
The trade payables are non-interest-bearing and are normally settled within 180 days upon
receipt of the invoices. The fair value of trade and bills payables as at the end of each of the
Relevant Periods approximated to their carrying amount due to their relatively short maturity
terms.
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills payables
Due to third parties ............. 42,207 36,631 — 17,621
Trade payables
Due to related parties ........... 11,409 3,933 — —
Due to subsidiaries ............. 302,251 207,773 311,723 430,129
Due to third parties ............. 271,340 485,138 522,979 432,187
Total .......................... 627,207 733,475 834,702 879,937
APPENDIX I ACCOUNTANTS’ REPORT
– I-107 –


--- page 552 ---
An ageing analysis of the trade and bills payables as at the end of each of the Relevant
Periods, based on the invoice date, is as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year ................... 623,956 729,822 816,848 876,565
Over 1 year ..................... 3,251 3,653 17,854 3,372
Total .......................... 627,207 733,475 834,702 879,937
The trade payables are non-interest-bearing and are normally settled within 180 days upon
receipt of the invoices. The fair value of trade and bills payables as at the end of each of the
Relevant Periods approximated to their carrying amount due to their relatively short maturity
terms.
25. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payroll payable .................. 17,363 16,721 16,193 16,232
Other tax payables ............... 2,293 2,838 3,559 3,967
Value-added tax payable ........... 28,109 31,064 27,213 21,630
Other payables .................. 5,327 6,072 22,903 8,486
Due to related parties (note 37) ...... ——1 1—
Accruals ....................... 507 3,342 2,230 3,231
Restricted shares repurchase
obligation* .................... 14,605 — 37,031 33,177
68,204 60,037 109,140 86,723
APPENDIX I ACCOUNTANTS’ REPORT
– I-108 –


--- page 553 ---
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Payroll payable .................. 1,112 1,039 1,087 1,098
Other tax payables ............... 365 578 794 725
Value-added tax payable ........... 13,280 13,466 7,652 12,121
Other payables .................. 2,893 3,935 20,420 4,880
Due to related parties ............. ——1 1—
Due to subsidiaries ............... 20,000 — — 7,878
Accruals ....................... — 2,761 2,212 3,231
Restricted shares repurchase
obligation* .................... 14,605 — 37,031 33,177
52,255 21,779 69,207 63,110
Other payables are non-interest-bearing, unsecured and have no fixed terms of settlement.
* Restricted shares repurchase obligation relates to the repurchase obligation subject by the Group to redeem the
amounts received from employees participate in the restricted share incentive plan for the subscription of the
restricted shares awarded to them at an approved subscription price. If the participated employees fail to meet the
vesting condition and are not eligible to vest, the Group will repurchase the restricted shares from the incentive
employees at an amounts equivalent to the amount received from the employees’ subscription for the restricted
shares granted, with an adjustment on the accumulated dividend paid between the grant date and the repurchased
date.
APPENDIX I ACCOUNTANTS’ REPORT
– I-109 –


--- page 554 ---
26. CONTRACT LIABILITIES
The Group
As at 31 December As at 30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances received from customers for
wireless communication modules
and solutions:
From related parties (note 37) ....... 6,449 244 799 244
From others ..................... 61,002 52,084 108,545 124,842
67,451 52,328 109,344 125,086
Analysed into:
Current portion .................. 67,451 52,328 109,344 125,086
Total .......................... 67,451 52,328 109,344 125,086
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Advances received from customers for
wireless communication modules
and solutions:
From a subsidiary ................ — — — 11,190
From related parties .............. 490 244 247 244
From others ..................... 45,387 34,339 79,509 88,603
45,877 34,583 79,756 100,037
Analysed into:
Current portion .................. 45,877 34,583 79,756 100,037
Total .......................... 45,877 34,583 79,756 100,037
APPENDIX I ACCOUNTANTS’ REPORT
– I-110 –


--- page 555 ---
Contract liabilities mainly include advances received to deliver products. The changes in
contract liabilities in the Relevant Periods were mainly due to the changes in advances received
from customers.
27. INTEREST-BEARING BANK BORROWINGS
The Group
31 December 2022 31 December 2023 31 December 2024 30 September 2025
Effective
Interest rate
(%) Maturity RMB’000
Effective
Interest rate
(%) Maturity RMB’000
Effective
Interest rate
(%) Maturity RMB’000
Effective
Interest rate
(%) Maturity RMB’000
Current
Bank loans — unsecured ..... 3.10%−4.25% 2023 240,720 — 1.95%−3.20% 2025 122,606 1.95%–3.20% 2025-2026 348,181
Bank loans — secured ...... 3.10%−3.95% 2023 70,000 3.80% 2024 5,016 — —
Discounted bill receivables ..... — — 1.30%−2.20% 2025 230,000 —
Subtotal .......... 310,720 5,016 352,606 348,181
Non-current
Bank loans — unsecured ..... 3.59%−4.25% 2024 60,00 0———
Subtotal .......... 60,00 0———
Total ........... 370,720 5,016 352,606 348,181
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into:
Bank borrowings repayable:
Within one year or on demand ..... 310,720 5,016 352,606 348,181
In the second year .............. 60,000 — — —
Total .......................... 370,720 5,016 352,606 348,181
Notes:
(i) All interest-bearing bank borrowings are denominated in RMB.
(ii) As at 31 December 2022, the Group’s interest-bearing bank borrowings with principal at RMB20,000,000 was
guaranteed by trade receivables of subsidiaries due from the parent entity within the Group.
(iii) As at 31 December 2022, the Group’s interest-bearing bank borrowings with principal at RMB50,000,000 was
guaranteed by letter of credit issued between the Company and its subsidiaries within the Group.
(iv) As at 31 December 2023, the Group’s interest-bearing bank borrowings with principal at RMB5,000,000 was
guaranteed by a third party.
APPENDIX I ACCOUNTANTS’ REPORT
– I-111 –


--- page 556 ---
(v) As at 31 December 2024, the Group discounted certain bills received by the Company from its subsidiaries to a
bank in exchange for cash.
The Company
31 December 2022 31 December 2023 31 December 2024 30 September 2025
Effective
Interest rate
(%) Maturity RMB’000
Effective
Interest rate
(%) Maturity RMB’000
Effective
Interest rate
(%) Maturity RMB’000
Effective
Interest rate
(%) Maturity RMB’000
Current
Bank loans — unsecured ..... 3.10%−3.70% 2023 190,672 — 1.95%−3.20% 2025 122,606 1.95%–3.20% 2025-2026 348,181
Bank loans — secured ...... 3.10%−3.95% 2023 70,00 0———
Discounted bill receivables ..... — — 1.30%−2.20% 2025 230,000 —
Subtotal .......... 260,672 — 352,606 348,181
Non-current
Bank loans — unsecured ..... 3.59%−4.25% 2024 60,00 0———
Subtotal .......... 60,00 0———
Total ........... 320,672 — 352,606 348,181
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into:
Bank borrowings repayable:
Within one year or on demand ..... 260,672 — 352,606 348,181
In the second year .............. 60,000 — — —
Total .......................... 320,672 — 352,606 348,181
Notes:
(i) All interest-bearing bank borrowings are denominated in RMB.
(ii) As at 31 December 2022, the Company’s interest-bearing bank borrowings with principal at RMB20,000,000 was
guaranteed by trade receivables of subsidiaries due from the parent entity within the group.
(iii) As at 31 December 2022, the Company’s interest-bearing bank borrowings with principal at RMB50,000,000 was
guaranteed by letter of credit issued between the Company and its subsidiaries within the Group.
(iv) As at 31 December 2024, the Company discounted certain bills received by the Company from its subsidiaries to a
bank in exchange for cash. The Company has retained the substantial risks and rewards, which include default risks
relating to such discounted bills, and accordingly, it continued to recognise the full carrying amounts of the bill
receivables and the associated cash received as borrowings from the bank, the corresponding discount charges is
recorded as interest expense.
APPENDIX I ACCOUNTANTS’ REPORT
– I-112 –


--- page 557 ---
28. DEFERRED INCOME
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Government grant* ............... 950 3,875 3,875 3,875
At beginning of the year/period ...... 2,521 950 3,875 3,875
Grants received during the
year/period .................... — 2 , 9 2 5——
Released to the profit or loss during
the year/period ................. (1,571) — — —
At the end of the year/period ....... 950 3,875 3,875 3,875
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Government grant* ............... — 2,925 2,925 2,925
At beginning of the year/period ...... 1,571 — 2,925 2,925
Grants received during the
year/period .................... — 2 , 9 2 5——
Released to the profit or loss during
the year/period ................. (1,571) — — —
At the end of the year/period ....... — 2,925 2,925 2,925
* The Group’s deferred government grants represented government grants received for projects and are credited to
consolidated statement of profit or loss and other comprehensive income on a straight-line basis over the expected
lives of the related assets or recognised as income on a systematic basis over the periods that the costs, which they
are intended to compensate, are expensed.
As at 31 December 2022, 2023, 2024 and 30 September 2025, the government grant received
are subject to the fulfilment of conditions relating to these grants.
APPENDIX I ACCOUNTANTS’ REPORT
– I-113 –


--- page 558 ---
29. DEFERRED TAX
The movements in deferred tax assets and liabilities during the Relevant Periods are as
follows:
Deferred tax assets
The Group
Leases
liabilities
Impairment of
financial assets
Inventory
provisions
Losses
available for
offsetting
against future
taxable profits
Share-based
payment
Public welfare
donations not
deducted for
tax purposes
Deferred
income Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 ............... 9,147 27,778 3,784 13,741 959 250 393 56,052
Deferred tax credited/(charged) to profit or loss .. (3,012) (9,706) (1,425) 6,555 (640) (250) (393) (8,871)
Deferred tax credited to other reserve ...... ————3 9——3 9
Gross deferred tax assets at 31 December 2022 ... 6,135 18,072 2,359 20,296 358 — — 47,220
At 1 January 2023 ............... 6,135 18,072 2,359 20,296 358 — — 47,220
Deferred tax credited/(charged) to profit or loss .. (2,269) 1,952 1,318 15,293 (344) — — 15,950
Deferred tax credited to other reserve ...... ———— 2—— 2
Gross deferred tax assets at 31 December 2023 ... 3,866 20,024 3,677 35,589 16 — — 63,172
At 1 January 2024 ............... 3,866 20,024 3,677 35,589 16 — — 63,172
Deferred tax credited/(charged) to profit or loss .. (1,717) 9,444 4,759 13,943 767 — — 27,196
Deferred tax credited to other reserve ...... ———— ( 3 ) —— ( 3 )
Gross deferred tax assets at 31 December 2024 ... 2,149 29,468 8,436 49,532 780 — — 90,365
At January 1, 2025 .............. 2,149 29,468 8,436 49,532 780 — — 90,365
Deferred tax credited/(charged) to profit or loss .. (355) (683) 1,411 (198) (1,288) — — (1,113)
Deferred tax credited to other reserve ...... ———— 2 , 0 6 8—— 2 , 0 6 8
Gross deferred tax assets at 30 September 2025 .. 1,794 28,785 9,847 49,334 1,560 — — 91,320
APPENDIX I ACCOUNTANTS’ REPORT
– I-114 –


--- page 559 ---
The Company
Leases
liabilities
Impairment
of financial
assets
Inventory
provisions
Losses
available for
offsetting
against future
taxable profits
Share-based
payment
Public welfare
donations not
deducted for
tax purposes
Deferred
income Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 .............. 8,537 26,887 3,781 4,904 959 250 392 45,710
Deferred tax credited/(charged) to profit or loss . (5,251) (10,993) (1,429) (4,904) (640) (250) (392) (23,859)
Deferred tax credited to other reserve ..... ————3 9——3 9
Gross deferred tax assets at 31 December 2022 . 3,286 15,894 2,352 — 358 — — 21,890
At 1 January 2023 .............. 3,286 15,894 2,352 — 358 — — 21,890
Deferred tax credited/(charged) to profit or loss . (1,017) (371) 1,323 — (344) — — (409)
Deferred tax credited to other reserve ..... ———— 2—— 2
Gross deferred tax assets at 31 December 2023 . 2,269 15,523 3,675 — 16 — — 21,483
At 1 January 2024 .............. 2,269 15,523 3,675 — 16 — — 21,483
Deferred tax credited/(charged) to profit or loss . (856) 10,178 4,737 — 767 — — 14,826
Deferred tax credited to other reserve ..... ———— ( 3 ) —— ( 3 )
Gross deferred tax assets at 31 December 2024 . 1,413 25,701 8,412 — 780 — — 36,306
At January 1, 2025 .............. 1,413 25,701 8,412 — 780 — — 36,306
Deferred tax credited/(charged) to profit or loss . (900) 577 1,407 7,493 (1,288) — — 7,289
Deferred tax credited to other reserve ..... ———— 2,068 — — 2,068
Gross deferred tax assets at 30 September 2025 . 513 26,278 9,819 7,493 1,560 — — 45,663
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 560 ---
Deferred tax liabilities
The Group
Right-of-use
assets
Fair value
changes of
equity
investments at
FVTPL
Finance lease
receivables Total
RMB’000 RMB’000 RMB’000 RMB’000
As at 1 January 2022 ............. 9,147 10,000 — 19,147
Deferred tax charged/(credited) to
profit or loss .................. (3,012) 10,969 — 7,957
Gross deferred tax liabilities as at
31 December 2022 .............. 6,135 20,969 — 27,104
As at 1 January 2023 ............. 6,135 20,969 — 27,104
Deferred tax charged/(credited) to
profit or loss .................. (2,529) 6,340 — 3,811
Gross deferred tax liabilities as at
31 December 2023 .............. 3,606 27,309 — 30,915
As at 1 January 2024 ............. 3,606 27,309 — 30,915
Deferred tax charged/(credited) to
profit or loss .................. (1,650) (8,066) — (9,716)
Gross deferred tax liabilities as at
31 December 2024 .............. 1,956 19,243 — 21,199
At 1 January 2025 ................ 1,956 19,243 — 21,199
Deferred tax credited/(charged) to
profit or loss .................. (854) (958) 514 (1,298)
Gross deferred tax liabilities at 30
September 2025 ................ 1,102 18,285 514 19,901
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 561 ---
The Company
Right-of-use
assets
Finance lease
receivables Total
RMB’000 RMB’000 RMB’000
As at 1 January 2022 ................. 8,537 — 8,537
Deferred tax credited to profit or loss ..... (5,251) — (5,251)
Gross deferred tax liabilities as at
31 December 2022 .................. 3,286 — 3,286
As at 1 January 2023 ................. 3,286 — 3,286
Deferred tax credited to profit or loss ..... (1,392) — (1,392)
Gross deferred tax liabilities as at
31 December 2023 .................. 1,894 — 1,894
As at 1 January 2024 ................. 1,894 — 1,894
Deferred tax credited to profit or loss ..... (729) — (729)
Gross deferred tax liabilities as at
31 December 2024 .................. 1,165 — 1,165
At 1 January 2025 .................... 1,165 — 1,165
Deferred tax credited/(charged) to profit or
loss ............................. (1,165) 514 (651)
Gross deferred tax liabilities at
30 September 2025 ................. — 514 514
APPENDIX I ACCOUNTANTS’ REPORT
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For presentation purposes, certain deferred tax assets and liabilities have been offset in the
consolidated statements of financial position of the Group and statements of financial position of
the Company. The following is an analysis of the deferred tax balances as at the end of each of the
Relevant Periods for financial reporting purposes:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in
the consolidated statements of
financial position ............... 41,085 59,564 88,410 89,704
Net deferred tax liabilities recognised
in the consolidated statements of
financial position ............... 20,969 27,309 19,243 18,284
The Company
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in
the statements of financial position . 18,604 19,589 35,140 45,149
Net deferred tax assets recognised in
the statements of financial position . ————
Deferred tax assets have not been recognised in respect of the following items:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses ...................... 9,465 16,892 15,745 24,116
Deductible temporary differences .... 528 3,165 18 38
9,993 20,057 15,763 24,154
APPENDIX I ACCOUNTANTS’ REPORT
– I-118 –


--- page 563 ---
30. SHARE CAPITAL AND TREASURY SHARES
The Group and the Company
A summary of movements in the Group and the Company’s share capital and treasury shares
are as follows:
Number of
shares in issue Share capital
Treasury
shares Total
(in thousand) RMB’000 RMB’000 RMB’000
At 1 January 2022 ................ 184,729 184,729 (68,766) 115,963
Share options exercised ............ 265 265 — 265
New issue of A shares ............ 54,731 54,731 — 54,731
Exercise of restricted shares units .... — — 11,048 11,048
Others ......................... (58) (58) 1,113 1,055
At 31 December 2022 ............. 239,667 239,667 (56,605) 183,062
Share options exercised ............ 793 793 — 793
New issue of A shares ............ 21,209 21,209 — 21,209
Exercise of restricted shares units ... — — 14,321 14,321
Others ......................... (28) (28) 285 257
At 31 December 2023 ............. 261,641 261,641 (41,999) 219,642
Exercise of share options .......... 161 161 — 161
Shares repurchased* .............. — — (37,287) (37,287)
At 31 December 2024 ............. 261,802 261,802 (79,286) 182,516
Shares repurchased* .............. — — (7,947) (7,947)
Exercise of share options .......... 564 564 — 564
Shares issued and granted for
restricted share incentive plan ..... 263 263 (5,997) (5,734)
Exercise of restricted shares ........ — — 25,730 25,730
Dividends of lapsed restricted shares .. — — 456 456
At 30 September 2025 ............ 262,629 262,629 (67,044) 195,585
At 1 January 2024 ................ 261,641 261,641 (41,999) 219,642
Exercise of share options (unaudited) . 161 161 — 161
Shares repurchased (unaudited) ...... — — (27,285) (27,285)
At 30 September 2024 (unaudited) ... 261,802 261,802 (69,284) 192,518
* During the year ended 31 December 2024 and nine months ended 30 September 2025, the Company repurchased an
aggregate of 1,822,850 shares and 492,356 shares at a consideration of RMB37,287,000 and RMB7,947,000,
respectively. The aforesaid 1,746,706 repurchased shares will be used for restricted share incentive plan and the
remaining 568,500 repurchased shares will be cancelled.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 564 ---
31. RESERVES
The Group
The amounts of the Group’s reserves and the movements therein for the Relevant Periods are
presented in the consolidated statements of changes in equity of the Historical Financial
Information.
Capital reserve
The capital reserve of the Group includes:
(i) The share premium arising from the excess of the net proceeds from issuance of shares
of the Company over its par value;
(ii) The share premium arising from the exercise of share options under the share option
incentive plan, which represents the net proceeds from issuance of the Company’s shares
to the incentive employees over its par value;
(iii) The transfer from treasury shares to capital reserve upon the exercise of restricted shares
under the Restricted Share Incentive Plan;
(iv) The share option and restricted share award compensation reserve due to equity-settled
share-based payment transactions, details of which were set out in note 33 to the
Historical Financial Information;
(v) The deferred tax asset arising from the amount of the estimated future tax deduction
exceeds the amount of the share-based cumulative remuneration expense;
Statutory surplus reserve
In accordance with the Company Law of the PRC, companies incorporated in Chinese
Mainland are required to allocate 10% of the statutory after-tax profits to the statutory surplus
reserve until the cumulative total of the reserve reaches 50% of the companies’ registered capital.
The statutory surplus reserve can be used to offset accumulated losses or increase the registered
capital of such companies subject to approval from the relevant PRC authorities. The statutory
surplus reserve is not available for dividend distribution to shareholders of such companies.
APPENDIX I ACCOUNTANTS’ REPORT
– I-120 –


--- page 565 ---
Exchange fluctuation reserve
The exchange fluctuation reserve represents foreign exchange differences arising from the
translation of the financial statements of foreign operations entities which functional currency are
different from the Group’s presentation currency.
The Company
The amounts of the Company’s reserves and the movements therein for the Relevant Periods
and nine months ended 30 September 2024 are presented as follows:
The Company
Y ear ended 31 December 2022
Share
reserve
Statutory
surplus reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2022 ................ 239,914 18,271 90,702 348,887
Total comprehensive income for
the year ...................... — — 41,498 41,498
Dividends ...................... — — (24,811) (24,811)
Exercise of share options .......... 4,772 — — 4,772
Exercise of restricted share units ..... 458 — — 458
Transfer to share capital ........... (54,731) — — (54,731)
Transfer to statutory surplus reserves . — 4,150 (4,150) —
Share-based compensation expenses .. 8,455 — — 8,455
Others ......................... (1,055) — — (1,055)
At 31 December 2022 ............. 197,813 22,421 103,239 323,473
APPENDIX I ACCOUNTANTS’ REPORT
– I-121 –


--- page 566 ---
Y ear ended 31 December 2023
Share
reserve
Statutory
surplus reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2023 ................ 197,813 22,421 103,239 323,473
Total comprehensive income for
the year ...................... — — 1,246 1,246
Dividends ...................... — — (25,890) (25,890)
Capital contribution by shareholders .. 571,722 — — 571,722
Exercise of share options .......... 11,360 — — 11,360
Exercise of restricted share units ..... 429 — — 429
Transfer to statutory surplus reserves . — 125 (125) —
Share-based compensation expenses .. 2,777 — — 2,777
Others ......................... (257) — — (257)
At 31 December 2023 ............. 783,844 22,546 78,470 884,860
Y ear ended 31 December 2024
Share
reserve
Statutory
surplus reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024 ................ 783,844 22,546 78,470 884,860
Total comprehensive income for
the year ...................... — — 12,868 12,868
Dividends ...................... — — (25,802) (25,802)
Exercise of share options .......... 2,774 — — 2,774
Exercise of restricted share units ..... 390 — — 390
Transfer to reserves ............... — 1,287 (1,287) —
Share-based compensation expenses .. 11,118 — — 11,118
At 31 December 2024 ............. 798,126 23,833 64,249 886,208
APPENDIX I ACCOUNTANTS’ REPORT
– I-122 –


--- page 567 ---
Nine months ended 30 September 2025
Share reserve
Statutory
surplus reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2025 ................ 798,126 23,833 64,249 886,208
Total comprehensive loss for
the period .................... — — (27,777) (27,777)
Dividends ...................... — — (33,929) (33,929)
Share-based compensation expenses .. 18,599 — — 18,599
Shares issued and granted for
restricted share incentive plan ..... 5,734 — — 5,734
Exercise of restricted shares ........ (11,226) — — (11,226)
Exercise of share options .......... 11,263 — — 11,263
At 30 September 2025 ............. 822,496 23,833 2,543 848,872
Nine months ended 30 September 2024 (Unaudited)
Share
reserve
Statutory
surplus reserve
Retained
profits Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2024 ................ 783,844 22,546 78,470 884,860
Total comprehensive income for
the period .................... — — 18,870 18,870
Dividends ...................... — — (25,802) (25,802)
Equity-settled share-based
compensation expenses .......... 5,539 — — 5,539
Exercise of share options .......... 2,774 — — 2,774
At 30 September 2024 ............. 792,157 22,546 71,538 886,241
32. DEEMED DISPOSAL OF A SUBSIDIARY
In 2024, one investor increased its shareholding interest in Pinsu Zhilian, the then subsidiary
of the Company, by making addition capital injection to Pinsu Zhilian. Upon the completion of the
capital injection, the Group’s interests in Pinsu Zhilian was diluted from 51% to 37.5%. Pinsu
Zhilian was deemed disposed and subsequently the Group accounted the investment in Pinsu as an
associate using equity method as the Group is assessed to have significant influence on the
operations and finance of Pinsu Zhilian.
APPENDIX I ACCOUNTANTS’ REPORT
– I-123 –


--- page 568 ---
Analysis of assets and liabilities over which control was lost:
RMB’000
Current assets ................................................... 7,855
Non-current assets ................................................ 25
Current liabilities ................................................ (12,648)
Non-current liabilities ............................................. —
Net liabilities of Pinsu Zhilian ...................................... (4,768)
Less: non-controlling interests ....................................... (2,264)
Net liabilities of Pinsu Zhilian attributable to the Group ................... (2,504)
Fair value of the Group’s 37.5% shareholding in Pinsu Zhilian .............. 2,402
Less: net liabilities of Pinsu Zhilian attributable to the Group ............... (2,504)
Gain on deemed disposal of a subsidiary ............................... 4,906
An analysis of the net outflow of cash and cash equivalents in respect of the deemed disposal
of a subsidiary is as follows:
2024
RMB
Cash consideration ............................................... —
Less: cash and bank balances disposed ................................ 1,294
Net outflow of cash and cash equivalents ..............................
in respect of the deemed disposal of a subsidiary ...................... (1,294)
APPENDIX I ACCOUNTANTS’ REPORT
– I-124 –


--- page 569 ---
33. SHARE-BASED PAYMENTS
The Group adopted and approved several equity-settled share-based plans, including 2020
stock option incentive plan and 2020 restricted share award plan on 3 July 2020, and 2024 stock
option incentive plan and 2024 restricted share award plan on 17 July 2024, pursuant to which
share award will be granted for eligible employees of the Group in order to recognise their
contributions to the growth and development of the Group and incentivize them to further promote
the development of the Group.
The 2020 stock option incentive plan and 2024 stock option incentive plan are collectively
referred as “Share Option Incentive Plan”, and 2020 restricted share plan and 2024 restricted share
plan are collectively referred as “Restricted Share Incentive Plan”.
Restricted Share Incentive Plan
On 20 July 2020, 1 July 2024 and 10 June 2025, the Group granted 3,200,000 restricted share
units (“ RSUs”), 3,510,000 RSUs and 500,000 RSUs of the Company, respectively, to eligible
employees at a subscribed price of RMB12.09 per share, RMB10.55 per share and RMB22.84 per
share, respectively.
The RSUs vest in several tranches commencing from the grant date. All granted RSUs shall
be subject to both a performance-based condition and a service-based condition.
There are no cash settlement alternatives under the Restricted Share Incentive Plan. The
Group accounts for the Restricted Share Incentive Plan as an equity-settled plan.
The granted shares of Restricted Share Incentive Plan are derived from the shares
repurchased from the secondary market under the special securities account of the Company.
The fair value of the RSUs granted on 20 July 2020, 1 July 2024 and 10 June 2025 were
valued at RMB11.43 per share, RMB8.93 per share and RMB22.06 per share, respectively, which
was determined based on the difference between the closing price of the Company’s A share on the
grant date and the agreed subscribed price.
Share-based payment expenses amounted to RMB7,712,000, RMB2,557,000, RMB10,132,000
and RMB14,499,000 under the Restricted Share Incentive Plan was recognized by the Group
during the years ended 31 December 2022, 2023 and 2024 and nine months ended 30 September
2025, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-125 –


--- page 570 ---
The following table summarises the movement of the Group’s Restricted Share Incentive Plan
during the Relevant Periods:
Weighted average
exercise price
per share *
Number of
restricted shares
RMB per share
At 1 January 2022 .................................. 12.07 2,817,220
Granted during the year .............................. ——
Vested during the year ............................... 12.07 1,205,880
Forfeited during the year ............................. 12.07 11,300
At 31 December 2022 ............................... 11.93 1,600,040
Granted during the year .............................. ——
Vested during the year ............................... 9.08 1,580,280
Forfeited during the year ............................. 9.08 19,760
At 31 December 2023 ............................... ——
Granted during the year .............................. 10.55 3,510,000
Vested during the year ............................... ——
Forfeited during the year ............................. 10.55 19,000
At 31 December 2024 ............................... 10.55 3,491,000
Granted during the period ............................ 22.84 500,000
Vested during the period ............................. 10.55 1,392,000
Forfeited during the period ........................... 10.55 24,200
At 30 September 2025 ............................... 12.97 2,574,800
* The exercise price of the restricted shares is subject to adjustment in the case of rights or bonus share issues, or
other similar changes in the Company’s share capital.
The weighted average remaining contractual life for the outstanding RSUs granted as at 31
December 2022, 2023 and 2024 and 30 September 2025 was 0.67 year, nil, 1.40 years and 1.23
years, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-126 –


--- page 571 ---
Stock Option Incentive Plan
On 20 July 2020, 2 February 2021, 1 July 2024 and 10 June 2025, the Group granted
1,040,000 share options, 360,000 share options, 1,600,000 share options and 500,000 share
options, respectively, to eligible employees at exercise price of RMB24.18 per share, RMB17.34
per share, RMB21.10 per share and RMB 45.67 per share, respectively.
These share options will be vested in several tranches commencing from the grant date and
all share options granted under the Stock Option Incentive Plan shall be subject to both a
performance-based condition and a service-based condition.
There are no cash settlement alternatives under the Stock Option Incentive Plan. The Group
accounts for the Stock Option Incentive Plan as an equity-settled plan.
The fair value of the share options granted on 20 July 2020, 2 February 2021, 1 July 2024
and 10 June 2025 was estimated at RMB 3.37, RMB1.38, RMB2.10 and RMB6.96 per share,
respectively. Fair value of the share options was determined under Black-Scholes Model.
APPENDIX I ACCOUNTANTS’ REPORT
– I-127 –


--- page 572 ---
Share-based payment expenses amounted to RMB743,000, RMB220,000, RMB986,000 and
RMB2,036,000 was recognized by the Group during the years ended 31 December 2022, 2023 and
2024 and the nine months ended 30 September 2025, respectively.
The following table summarises the movement of the Group’s Stock Option Incentive Plan
during the Relevant Periods:
Weighted average
exercise price
per share *
Number of
share options
RMB per share
At 1 January 2022 .................................. 22.36 990,400
Adjustment** ..................................... — 287,970
Vested during the year ............................... 19.06 264,700
Forfeited during the year ............................. 24.16 19,100
At 31 December 2022 ............................... 16.21 994,570
Granted during the year .............................. ——
Vested during the year ............................... 15.31 793,390
Forfeited during the year ............................. 18.48 2,600
At 31 December 2023 ............................... 18.38 198,580
Granted during the year .............................. 21.10 1,600,000
Vested during the year ............................... 18.32 160,360
Forfeited during the year ............................. 20.60 47,220
At 31 December 2024 ............................... 21.10 1,591,000
Granted during the period ............................ 45.67 500,000
Vested during the period ............................. 20.97 564,000
Forfeited during the period ........................... 21.10 19,000
At 30 September 2025 ............................... 27.52 1,508,000
* The exercise price of the share options is subject to adjustment in the case of rights or bonus share issues, or other
similar changes in the Company’s share capital.
** This adjustment was primarily attributable to the implementation of the Company’s 2021 annual profit distribution
in June 2022, which was effected through a capitalization of capital reserves. Pursuant to the Stock Option
Incentive Plan, the Board of Directors approved a corresponding adjustment to the number of shares exercisable
under the outstanding stock options.
APPENDIX I ACCOUNTANTS’ REPORT
– I-128 –


--- page 573 ---
The weighted average remaining contractual life for the outstanding share options granted as
at 31 December 2022, 2023 and 2024 and 30 September 2025 was 0.67 year, 0.67 year, 1.33 years
and 1.22 years, respectively.
The fair value of the share options at the grant date are estimated with the following key
inputs:
20 July 2020
2 February
2021 1 July 2024 10 June 2025
Fair value of the Company’s A Shares
(RMB per share) ............... 23.52 15.73 19.58 44.90
Expected volatility (%) ............ 22.28−23.94 21.47−25.39 20.78−23.18 30.54–34.11
Risk-free interest rate (%) .......... 1.46−1.75 2.60−2.75 1.50−2.75 1.40–1.43
34. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30
September 2025, the Group had non-cash additions of right-of-use assets and lease liabilities of
RMB21,722,000, RMB1,217,000, RMB946,000 and RMB7,826,000, respectively, in respect of the
Group’s lease arrangements for buildings and premises.
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30
September 2025, the Group had non-cash reductions of trade payables settled by endorsement of
bills receivable of nil, RMB30,265,000, RMB75,876,000 and RMB145,319,000, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-129 –


--- page 574 ---
(b) Changes in liabilities arising from financing activities
Interest bearing
bank borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2022 .................... 290,523 40,630 331,153
Changes from financing cash flow ....... 68,069 (20,224) 47,845
New lease .......................... — 21,722 21,722
Interest accretion ..................... 12,128 1,758 13,886
At December 2022 and 1 January 2023 .... 370,720 43,886 414,606
Changes from financing cash flow ....... (372,672) (19,968) (392,640)
New lease .......................... — 1,217 1,217
Interest accretion ..................... 6,968 1,676 8,644
Early termination of a lease ............ — (1,041) (1,041)
At 31 December 2023 and 1 January 2024 . 5,016 25,770 30,786
Changes from financing cash flow ....... 342,134 (16,539) 325,595
New lease .......................... — 946 946
Interest accretion ..................... 5,456 841 6,297
Early termination of a lease ............ — (1,009) (1,009)
At 31 December 2024 and 1 January 2025 . 352,606 10,009 362,615
Changes from financing cash flow ....... (11,401) (8,049) (19,450)
New lease .......................... — 7,826 7,826
Interest accretion ..................... 6,976 372 7,348
At 30 September 2025 ................. 348,181 10,158 358,339
At 1 January 2024 .................... 5,016 25,770 30,786
Changes from financing cash flow
(unaudited) ....................... 120,655 (13,784) 106,871
Early termination of a lease (unaudited) ... — (1,009) (1,009)
New lease .......................... — 946 946
Interest accretion (unaudited) ........... 4,350 701 5,051
At 30 September 2024 (unaudited) ....... 130,021 12,624 142,645
APPENDIX I ACCOUNTANTS’ REPORT
– I-130 –


--- page 575 ---
(c) Total cash outflow for leases
The total cash outflow for leases included in the consolidated statements of cash flows is as
follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Within operating activities ............ 1,714 1,967 1,970 1,050 55
Within financing activities ............ 20,224 19,968 16,539 14,270 8,049
21,938 21,935 18,509 15,320 8,104
35. PLEDGE OF ASSETS
At the end of each of the Relevant Periods, the Group’s pledge of assets is included in notes
23 and 27 to the Historical Financial Information.
36. COMMITMENTS
The Group had no capital commitments at the end of each of the Relevant Periods.
37. RELATED PARTY TRANSACTIONS
The directors are of the view that the following companies are related parties that have
material transactions or balances with the Group during the Relevant Periods.
(a) Name and relationships of the related parties
Name Relationship
ٟMeiLink .............. Joint Venture
LianDong Gezhi ............... Joint Venture
ShuoGe Intelligent .............. Associate
Pinsu Zhilian * ................ Associate
Shenzhen Fenghuang Joint-Stock
Cooperative Company ( ଉέ̹ჾ
΅ΥЪʮ̡ )( “ Fenghuang
Joint-Stock ”) ................
Ultimate controlling shareholder of Fenghuangshan
Investment
Shenzhen Mingcheng Property
Service Co., Ltd. (ي
ʮ̡ )( “ Mingcheng ”).
Company controlled by Fenghuan Joint-Stock
APPENDIX I ACCOUNTANTS’ REPORT
– I-131 –


--- page 576 ---
Name Relationship
Shenzhen Chuyue Emotional
Catering Management Co., Ltd.
(ʮ
̡)( “ Chuyue ”) ..............
Company controlled by Mr. WANG Cheng, shareholder of
the Company
* Pinsu Zhilian was deconsolidated by the Group in 2024 and accounted for as an associate of the Group. The
balance due from/to Pinsu Zhilian as at 31 December 2024 and 30 September 2025 was presented as related parties
transactions and balances.
(b) The Group had the following transactions with related parties during the Relevant
Periods and the nine months ended 30 September 2024:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Sales of products and
services to:
ٟMeiLink ..... 2,838 30,146 7,389 2,903 34,747
ShuoGe Intelligent ..... 797 870 484 440 47
LianDong Gezhi ....... — 2,709 792 779 3,333
Pinsu Zhilian ......... ———— 5 , 4 2 6
3,635 33,725 8,665 4,122 43,553
Purchase of processing
services from:
ShuoGe Intelligent ..... 29,714 22,063 25,398 17,504 22,610
Pinsu Zhilian ........ ———— 5
29,714 22,063 25,398 17,504 22,615
Expenses relating to other
services purchased from:
Chuyue ............. 108 353 227 171 100
108 353 227 171 100
APPENDIX I ACCOUNTANTS’ REPORT
– I-132 –


--- page 577 ---
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Lease payments made to:
Fenghuang Joint-Stock . 1,534 1,638 1,521 1,135 1,082
Mingcheng .......... 12,729 10,394 8,075 7,543 2,652
14,263 12,032 9,596 8,678 3,734
Finance cost on lease
liabilities from:
Fenghuang Joint-Stock .. 218 163 105 85 39
Mingcheng .......... 1,207 758 346 295 96
1,425 921 451 380 135
(c) Outstanding balances with related parties:
The Group
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due from related parties:
ٟMeiLink (a) ........... — 7,891 — 14,964
LianDong GeZhi (b) ............ — — 19 3,557
Pinsu Zhilian (c) ............... — — 9,717 10,003
Fenghuang Joint-Stock (d) ........ 188 104 — 11
Mingcheng (e) ................. 1,376 764 — 50
ShuoGe Intelligent (a) ........... ——4 8—
ShuoGe Intelligent (f) ........... — — 319 798
1,564 8,759 10,103 29,383
Amounts due to related parties:
ShuoGe Intelligent (f) ........... 11,409 7,044 5,883 5,547
Chuyue (g) ................... ——1 1—
ٟMeiLink (a) ........... 6,449 244 799 244
Fenghuang Joint-Stock (d) ........ 4,287 3,029 1,637 595
Mingcheng (e) ................. 20,873 12,095 4,014 1,457
43,018 22,412 12,344 7,843
APPENDIX I ACCOUNTANTS’ REPORT
– I-133 –


--- page 578 ---
(a) Trade in nature, included in “Trade and bills receivables” and “Contract liabilities” in the
consolidated statements of financial position.
(b) Trade in nature, included in “Trade and bills receivables” and “Contract liabilities ” in the
consolidated statements of financial position.
(c) Trade in nature, included in “Trade and bills receivables” in the consolidated statements of
financial position.
(d) Trade in nature, included in “Prepayments, other receivables and other assets” and “Lease
liabilities” in the consolidated statements of financial position.
(e) Trade in nature, included in “Prepayments, other receivables and other assets” and “Lease
liabilities” in the consolidated statements of financial position.
(f) Trade in nature, included in “Prepayments, other receivables and other assets” and “Trade and
bills payables” in the consolidated statements of financial position.
(g) Trade in nature, included in “Other payables and accruals” in the consolidated statements of
financial position.
(d) Compensation of key management personnel of the Group
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Salaries, bonuses, allowances and
benefits in kind ................ 4,884 5,152 5,439 2,424
Pension scheme contributions ....... 128 129 131 91
Equity-settled share-based payment
expenses ..................... 1,110 391 — —
6,122 5,672 5,570 2,515
Further details of directors’ and the chief executive’s remuneration are included in note 8 to
the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-134 –


--- page 579 ---
38. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each
Relevant Periods were as follows:
Financial assets
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial assets at amortised cost:
Trade and bills receivables ....... 420,301 659,426 1,016,069 761,422
Financial assets included in
prepayments,
other receivables and other assets . 190,450 156,059 162,171 261,201
Restricted cash ................ 12,828 9,584 7,998 5,340
Cash and cash equivalents ....... 72,287 138,926 341,879 315,854
Financial assets at FVOCI:
Debt investments ............... 5,122 38,427 9,992 26,739
Financial assets at FVTPL:
Equity investments .............. 198,875 234,246 189,971 176,137
899,863 1,236,668 1,728,080 1,546,693
Financial liabilities
As at 31 December
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Financial liabilities at amortised cost:
Trade and bills payables ......... 331,384 485,880 579,916 571,106
Financial liabilities included in other
payables and accruals ........... 20,439 9,414 62,175 44,894
Lease liabilities .................. 43,886 25,770 10,009 10,158
Interest-bearing bank borrowings ..... 370,720 5,016 352,606 348,181
766,429 526,080 1,004,706 974,339
APPENDIX I ACCOUNTANTS’ REPORT
– I-135 –


--- page 580 ---
39. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, trade and bills
receivables, financial assets included in prepayments, other receivables and other assets, trade and
bills payables, financial liabilities included in other payables and accruals, and interest-bearing
bank borrowings approximate to their carrying amounts largely due to the short-term maturities of
these instruments.
The Group’s finance team headed by the chief finance controller or his/her designator is
responsible for determining the policies and procedures for the fair value measurement of financial
instruments. The finance team reports directly to the head of finance. At each reporting date, the
finance team analyses the movements in the values of financial instruments and determines the
major inputs applied in the valuation. The valuation is reviewed and approved by the head of
finance.
The fair values of the financial assets and liabilities are included at the amount at which the
instrument could be exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. The following methods and assumptions were used to estimate the fair
values:
The fair values of the non-current portion of interest-bearing bank have been calculated by
discounting the expected future cash flows using rates currently available for instruments with
similar terms, credit risk and remaining maturities. The changes in fair value as a result of the
Group’s own non-performance risk for non-current portion of interest-bearing bank as at 31
December 2022 were assessed to be insignificant. Hence, the fair value of the non-current portion
of interest-bearing bank and other borrowings is approximate to its carrying amount as at 31
December 2022.
APPENDIX I ACCOUNTANTS’ REPORT
– I-136 –


--- page 581 ---
Fair value hierarchy
The following tables illustrate the fair value measurement hierarchy of the Group’s financial
instruments:
Assets measured at fair value:
As at 31 December 2022
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments at FVTPL ....... — 163,875 35,000 198,875
Debt investments at FVOCI ........ — 5,122 — 5,122
Total .......................... — 168,997 35,000 203,997
As at 31 December 2023
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments at FVTPL ....... — 180,506 53,740 234,246
Debt investments at FVOCI ........ — 38,427 — 38,427
Total .......................... — 218,933 53,740 272,673
APPENDIX I ACCOUNTANTS’ REPORT
– I-137 –


--- page 582 ---
As at 31 December 2024
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments at FVTPL ....... — 108,579 81,392 189,971
Debt investments at FVOCI ........ — 9,992 — 9,992
Total .......................... — 118,571 81,392 199,963
As at 30 September 2025
Fair value measurement using
Quoted prices
in active
markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments at FVTPL ....... — 94,745 81,392 176,137
Debt investments at FVOCI ........ — 26,739 — 26,739
Total .......................... — 121,484 81,392 202,876
The fair values of the bank acceptance bills at fair value through other comprehensive income
(Level 2) have been calculated by discounting the expected cash flows from the receivables based
on the market interest rates of instruments with similar terms and risks.
The fair value of certain unlisted equity investments at fair value through profit or loss have
been estimated with reference to the recent share transfer or capital injection transaction price of
the underlying investments (Level 2). And for unlisted equity investments that do not have recent
transaction price, the fair values have been estimated using asset-based and profit-based
approaches (Level 3).
APPENDIX I ACCOUNTANTS’ REPORT
– I-138 –


--- page 583 ---
Below is a summary of significant unobservable inputs to the valuation of financial
instruments together with a quantitative sensitivity analysis as at the end of each Relevant Periods:
As at 31 December 2022
Valuation
technique
Significant
unobservable input Range
Sensitivity of fair value
to the input
Unlisted equity
investments ..........
Valuation
multiples
Average P/B
multiple of peers
4.94 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB191,000
Average P/S
multiple of peers
6.36 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB314,000
Discount for lack
of marketability
37% 5% increase/decrease
in discount would
result in
decrease/increase
in fair value by
RMB303,000
APPENDIX I ACCOUNTANTS’ REPORT
– I-139 –


--- page 584 ---
As at 31 December 2023
Valuation
technique
Significant
unobservable input Range
Sensitivity of fair value
to the input
Unlisted equity
investments ..........
Valuation
multiples
Average P/B
multiple of peers
4.59 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB177,000
Average P/S
multiple of peers
6.74 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB488,000
Average P/E
multiple of peers
38.35 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB667,000
Average P/RR
multiple of peers
61.26 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB880,000
Discount for lack
of marketability
23% to
34%
5% increase/decrease
in discount would
result in
decrease/increase
in fair value by
RMB957,000
APPENDIX I ACCOUNTANTS’ REPORT
– I-140 –


--- page 585 ---
As at 31 December 2024
Valuation
technique
Significant
unobservable input Range
Sensitivity of fair value
to the input
Unlisted equity
investments ..........
Valuation
multiples
Average P/B
multiple of peers
6.39 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB574,000
Average P/E
multiple of peers
35.75 to
79.07
5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB1,507,000
Average P/RR
multiple of peers
42.24 to
79.45
5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB1,474,000
Discount for lack
of marketability
34% to
36%
5% increase/decrease
in discount would
result in
decrease/increase
in fair value by
RMB1,846,000
APPENDIX I ACCOUNTANTS’ REPORT
– I-141 –


--- page 586 ---
As at 30 September 2025
Valuation
technique
Significant
unobservable input Range
Sensitivity of fair value
to the input
Unlisted equity
investments ..........
Valuation
multiples
Average P/B
multiple of peers
10.36 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB1,435,000
Average P/E
multiple of peers
36.69 5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB24,000
Average P/RR
multiple of peers
59.3 to
94.51
5% increase/decrease
in multiple would
result in
increase/decrease
in fair value by
RMB2,820,000
Discount for lack
of marketability
33% to
37%
5% increase/decrease
in discount would
result in
decrease/increase
in fair value by
RMB2,561,000
The discount for lack of marketability represents the amounts of premiums and discounts
determined by the Group that market participants would take into account when pricing the
investments.
APPENDIX I ACCOUNTANTS’ REPORT
– I-142 –


--- page 587 ---
40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise interest-bearing bank borrowings, and
cash and cash equivalents. The main purpose of these financial instruments is to raise finance for
the Group’s operations. The Group has various other financial assets and liabilities such as trade
and bills receivables, trade and bills payables and etc., which arise directly from its operations.
The main risks arising from the Group’s financial instruments are foreign currency risk,
credit risk and liquidity risk. The directors reviews and agrees policies for managing each of these
risks and they are summarised below.
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from sales or
purchases by the Company and the Group’s subsidiaries in currencies other than their respective
functional currencies.
The following table demonstrates the sensitivity at the end of each of the Relevant Periods to
a reasonably possible change in the foreign exchange rates, with all other variables held constant,
of the Group’s profit after tax and equity.
Increase/
(decrease) in
foreign exchange
rate
Decrease/
(increase) in
profit after tax
(Increase)/
decrease in equity
% RMB’000 RMB’000
Y ear ended 31 December 2022
If RMB weakens against the USD ........ 5 (358) (358)
If RMB strengthens against the USD ...... (5) 358 358
If RMB weakens against the EUR ........ 51 21 2
If RMB strengthens against the EUR ...... (5) (12) (12)
If RMB weakens against the HKD ....... 522
If RMB strengthens against the HKD ..... (5) (2) (2)
Y ear ended 31 December 2023
If RMB weakens against the USD ........ 5 (2,664) (2,664)
If RMB strengthens against the USD ...... (5) 2,664 2,664
If RMB weakens against the EUR ........ 5 1,756 1,756
If RMB strengthens against the EUR ...... (5) (1,756) (1,756)
If RMB weakens against the HKD ....... 522
If RMB strengthens against the HKD ..... (5) (2) (2)
APPENDIX I ACCOUNTANTS’ REPORT
– I-143 –


--- page 588 ---
Increase/
(decrease) in
foreign exchange
rate
Decrease/
(increase) in
profit after tax
(Increase)/
decrease in equity
% RMB’000 RMB’000
If RMB weakens against the GBP ........ 566
If RMB strengthens against the GBP ...... (5) (6) (6)
Y ear ended 31 December 2024
If RMB weakens against the USD ........ 51 41 4
If RMB strengthens against the USD ...... (5) (14) (14)
If RMB weakens against the EUR ........ 5 1,394 1,394
If RMB strengthens against the EUR ...... (5) (1,394) (1,394)
If RMB weakens against the HKD ....... 511
If RMB strengthens against the HKD ..... (5) (1) (1)
Nine months ended 30 September 2025
If RMB weakens against the USD ........ 5 8,047 8,047
If RMB strengthens against the USD ...... (5) (8,047) (8,047)
If RMB weakens against the EUR ........ 5 563 563
If RMB strengthens against the EUR ...... (5) (563) (563)
If RMB weakens against the HKD ....... 511
If RMB strengthens against the HKD ..... (5) (1) (1)
Credit risk
The Group trades only with recognised and creditworthy parties. It is the Group’s policy that
all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis. The credit risk of the Group’s
other financial assets, which comprise cash and cash equivalents, restricted cash, trade and bills
receivables, financial assets included in prepayments, other receivables and other assets, with a
maximum exposure equal to the carrying amounts of these instruments.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on
the Group’s credit policy, which is mainly based on past due information unless other information
is available without undue cost or effort, and year-end staging classification as at the end of each
of the Relevant Periods.
The amounts presented are gross carrying amounts for financial assets.
APPENDIX I ACCOUNTANTS’ REPORT
– I-144 –


--- page 589 ---
At 31 December 2022
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* ....... — — — 518,154 518,154
Debt investments at
FVOCI ........... 5 , 1 2 2——— 5 , 1 2 2
Financial assets
included in
prepayments, other
receivables and other
assets
— Normal** ....... 189,882 — — — 189,882
— Doubtful** ...... — — 22,715 — 22,715
Restricted cash ....... 12,828 — — — 12,828
Cash and cash
equivalents ........ 72,287 — — — 72,287
280,119 — 22,715 518,154 820,988
At 31 December 2023
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* ....... — — — 770,873 770,873
Debt investments at
FVOCI ........... 38,427 — — — 38,427
Financial assets
included in
prepayments, other
receivables and other
assets
— Normal** ....... 156,128 — — — 156,128
— Doubtful** ...... — — 22,715 — 22,715
Restricted cash ....... 9 , 5 8 4——— 9 , 5 8 4
Cash and cash
equivalents ........ 138,926 — — — 138,926
343,065 — 22,715 770,873 1,136,653
APPENDIX I ACCOUNTANTS’ REPORT
– I-145 –


--- page 590 ---
At 31 December 2024
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* ....... — — — 1,119,878 1,119,878
Debt investments at
FVOCI ........... 9 , 9 9 2——— 9 , 9 9 2
Financial assets
included in
prepayments, other
receivables and other
assets
— Normal** ....... 163,002 — — — 163,002
— Doubtful** ...... — — 22,715 — 22,715
Restricted cash ....... 7 , 9 9 8——— 7 , 9 9 8
Cash and cash
equivalents ........ 341,879 — — — 341,879
522,871 — 22,715 1,119,878 1,665,464
At 30 September 2025
12-month
ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills
receivables* ....... — — — 860,191 860,191
Debt investments at
FVOCI ........... 26,739 — — — 26,739
Financial assets
included in
prepayments, other
receivables and other
assets
— Normal** ....... 259,513 — — — 259,513
— Doubtful** ...... — — 22,715 — 22,715
Restricted cash ....... 5 , 3 4 0——— 5 , 3 4 0
Cash and cash
equivalents ........ 315,854 — — — 315,854
607,446 — 22,715 860,191 1,490,352
APPENDIX I ACCOUNTANTS’ REPORT
– I-146 –


--- page 591 ---
* For trade and bills receivables at the end of each of the Relevant Periods, the Group applies the simplified approach
for impairment, information based on the provision matrix is disclosed in note 20 to the Historical Financial
Information.
** The credit quality of the financial assets included in prepayments, other receivables and other assets is considered
to be “normal” when they are not past due and there is no information indicating that the financial assets had a
significant increase in credit risk since initial recognition. Otherwise, the credit quality of the financial assets is
considered to be “doubtful”.
Liquidity risk
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool.
This tool considers the maturity of both its financial instruments and financial assets (e.g., trade
and bills receivables) and projected cash flows from operations.
The Group’s objective is to maintain a balance between continuity of funding and flexibility
through the use of interest-bearing bank borrowings and lease liabilities.
The maturity profile of the Group’s financial liabilities as at the end of each Relevant
Periods, based on the contractual undiscounted payments, is as follows:
At 31 December 2022
Less than 12
months or on
demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables ............... 331,384 — 331,384
Financial liabilities included in other
payables and accruals ............... 20,439 — 20,439
Lease liabilities ...................... 18,443 28,149 46,592
Interest-bearing bank borrowings ......... 317,570 61,900 379,470
687,836 90,049 777,885
APPENDIX I ACCOUNTANTS’ REPORT
– I-147 –


--- page 592 ---
At 31 December 2023
Less than 12
months or on
demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables ............... 485,880 — 485,880
Financial liabilities included in other
payables and accruals ............... 9,414 — 9,414
Lease liabilities ...................... 17,310 9,522 26,832
Interest-bearing bank borrowings ......... 5,141 — 5,141
517,746 9,522 527,268
At 31 December 2024
Less than 12
months or on
demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables ............... 579,916 — 579,916
Financial liabilities included in other
payables and accruals ............... 62,175 — 62,175
Lease liabilities ...................... 8,840 1,442 10,282
Interest-bearing bank borrowings ......... 353,373 — 353,373
1,004,304 1,442 1,005,746
At 30 September 2025
Less than 12
months or on
demand 1 to 5 years Total
RMB’000 RMB’000 RMB’000
Trade and bills payables .............. 571,106 — 571,106
Financial liabilities included in other
payables and accruals ............... 44,893 — 44,893
Lease liabilities ..................... 6,508 3,943 10,451
Interest-bearing bank borrowings ......... 353,451 — 353,451
975,958 3,943 979,901
APPENDIX I ACCOUNTANTS’ REPORT
– I-148 –


--- page 593 ---
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a
strong credit profile and healthy capital ratios in order to support its business and maximize
shareholders’ value.
The Group manages its capital structure and makes adjustments to it in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. No changes
were made in the objectives, policies or processes for managing capital during the Relevant
Periods.
The Group monitors capital using the debt-to-asset ratio, which is total liabilities divided by
total assets. The debt-to-asset ratios as at the end of each of the Relevant Periods were as follows:
As at 31 December,
As at
30 September
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Total liabilities .................. 906,452 664,929 1,192,444 1,169,340
Total assets ..................... 1,726,703 2,144,722 2,759,557 2,850,665
Debt-to-asset ratio ................ 52% 31% 43% 41%
41. TRANSFERS OF FINANCIAL ASSETS
(a) Transferred financial assets that are not derecognised in their entirety
At 31 December 2022, 2023 and 2024 and 30 September 2025, the Group endorsed certain
bills receivables accepted by banks in Chinese Mainland (the “ Endorsed Bills ”) with a carrying
amount of nil, RMB543,000, RMB1,315,000 and RMB 621,000 to certain of its suppliers in order
to settle the trade payables due to such suppliers (the “ Endorsement ”). In the opinion of the
directors, the Group has retained the substantial risks and rewards, which include default risks
relating to such Endorsed Bills, and accordingly, it continued to recognise the full carrying
amounts of the Endorsed Bills and the associated trade payables settled. Subsequent to the
Endorsement, the Group did not retain any rights on the use of the Endorsed Bills, including the
sale, transfer or pledge of the Endorsed Bills to any other third parties.
APPENDIX I ACCOUNTANTS’ REPORT
– I-149 –


--- page 594 ---
(b) Transferred financial assets that are derecognised in their entirety
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group endorsed certain
bills receivable accepted by banks in Chinese Mainland (the “ Derecognised Bills ”) to certain of its
suppliers in order to settle the trade payables due to such suppliers with a carrying amount in
aggregate of nil, RMB3,431,000, RMB49,380,000 and RMB54,673,000. The Derecognised Bills
had a maturity of one to six months at the end of each of the Relevant Periods. In accordance with
the Law of Negotiable Instruments in the PRC, the holders of the Derecognised Bills may exercise
the right of recourse against any, several or all of the persons liable for the Derecognised Bills,
including the Group, in disregard of the order of precedence (the “ Continuing Involvement ”). In
the opinion of the directors, the risk of the Group being claimed by the holders of the
Derecognised Bills is remote in the absence of a default of the accepted banks. The Group has
transferred substantially all risks and rewards relating to the Derecognised Bills. Accordingly, it
has derecognised the full carrying amounts of the Derecognised Bills and the associated trade
payables. The maximum exposure to loss from the Group’s Continuing Involvement in the
Derecognised Bills and the undiscounted cash flows to repurchase these Derecognised Bills is
equal to their carrying amounts. In the opinion of the directors, the fair values of the Group’s
Continuing Involvement in the Derecognised Bills are not significant.
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30
September 2025, the Group has not recognised any gain or loss on the date of transfer of the
Derecognised Bills. No gains or losses were recognised from the Continuing Involvement, both
during the year or cumulatively.
42. EVENTS AFTER THE RELEV ANT PERIOD
On 20 November 2025, the Company cancelled 844,400 shares that were repurchased for
cancellation, representing 0.32% of the total share capital prior to the cancellation. Following this
cancellation, the Company’s total share capital will decrease from 262,630,100 shares to
261,785,700 shares.
On 1 December 2025, the Company cancelled 30,000 shares that were repurchased for
restricted share incentive plan, representing 0.01% of the total share capital prior to the
cancellation. Following this cancellation, the Company’s total share capital will decrease from
261,785,700 shares to 261,755,700 shares.
Except above, there were no other significant events that required additional disclosure or
adjustments occurred after the end of the Relevant Periods.
43. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of the
companies now comprising the Group in respect of any period subsequent to 30 September 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-150 –


--- page 595 ---
The following information does not form part of the Accountants’ Report from Ernst & Young,
Certified Public Accountants, Hong Kong, the Company’ s reporting accountants, as set out in
Appendix I to this prospectus, and is included herein for information purposes only. The unaudited
pro forma financial information should be read in conjunction with the “Financial Information”
section in this prospectus and the Accountants’ Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets of
the Group prepared in accordance with paragraph 4.29 of the Rules Governing the Listing of
Securities on the Stock Exchange of Hong Kong Limited and with reference to Accounting
Guideline 7 Preparation of Pro Forma Financial Information for inclusion in Investment Circulars
issued by the Hong Kong Institute of Certified Public Accountants is to illustrate the effect of the
Global Offering on the consolidated net tangible assets of the Group attributable to owners of the
Company as at 30 September 2025 as if the Global Offering had taken place on that date.
The unaudited pro forma statement of adjusted consolidated net tangible assets of the Group
has been prepared for illustrative purposes only and because of its hypothetical nature, it may not
give a true picture of the consolidated net tangible assets of the Group attributable to owners of
the Company had the Global Offering been completed as at 30 September 2025 or at any future
date.
Consolidated net
tangible assets of
the Group
attributable to
owners of the
C o m p a n ya sa t
30 September 2025
Estimated net
proceeds from the
Global Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets of
the Group
attributable to
owners of the
Company as at
30 September 2025
Unaudited pro forma adjusted
consolidated net tangible assets of
the Group attributable to owners of
the Company per Share as at
30 September 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2, 4) (Note 3) (Note 4)
Based on the maximum Offer
Price of HK$28.86 per
Share .............. 1,576,597 839,362 2,415,959 8.14 9.17
Notes:
(1) The consolidated net tangible assets of the Group attributable to owners of the Company as at 30 September 2025
were equal to the Group’s consolidated net assets attributable to owners of the Company as at 30 September 2025
of RMB1,681,325,000 after deducting of other intangible assets of RMB104,728,000 as at 30 September 2025 set
out in the Accountants’ Report in Appendix I in this prospectus.
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-1 –


--- page 596 ---
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$28.86 per Share, after the
deduction of the underwriting fees and commissions and other related expenses payable by the Company (excluding
the listing expenses that have been charged to profit or loss during the Track Record Period).
(3) The unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the
Company per Share is arrived at after adjustments referred to in the preceding paragraphs and on the basis that
296,756,700 Shares were in issue assuming the Global Offering and subsequent share cancellation have been
completed on 30 September 2025.
(4) For the purpose of this unaudited pro forma statement of adjusted consolidated net tangible assets, the balances of
amounts stated in Renminbi (“ RMB”) are converted into Hong Kong dollars (“ HK$”) at an exchange rate of
HK$1.00 to RMB0.88787. No representation is made that the RMB amounts have been, could have been or may be
converted to Hong Kong dollars, or vice versa, at that rate.
(5) No other adjustment has been made to the unaudited pro forma adjusted consolidated net tangible asset of the
Group to reflect any trading result or other transactions of the Group entered into subsequent to 30 September
2025.
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-2 –


--- page 597 ---
B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from our reporting accountants, Ernst & Young,
Certified Public Accountants, Hong Kong, prepared for the purpose of incorporation in this
prospectus, in respect of the unaudited pro forma financial information of the Group.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
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To the Directors of MeiG Smart Technology Co., Ltd.
We have completed our assurance engagement to report on the compilation of unaudited pro
forma financial information of MeiG Smart Technology Co., Ltd. (the “ Company ”) and its
subsidiaries (hereinafter collectively referred to as the “ Group ”) by the directors of the Company
(the “ Directors ”) for illustrative purposes only. The unaudited pro forma financial information
consists of the unaudited pro forma consolidated net tangible assets as at 30 September 2025, and
related notes as set out on pages IIA-2 of the prospectus dated 27 February 2026 (“ the
Prospectus ”) issued by the Company (the “ Unaudited Pro Forma Financial Information ”). The
applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma
Financial Information are described in Appendix IIA(A) to the prospectus.
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the global offering of shares of the Company on the Group’s financial
position as at 30 September 2025 as if the transaction had taken place at 30 September 2025. As
part of this process, information about the Group’s financial position has been extracted by the
Directors from the Group’s financial statements for the period ended 30 September 2025, on which
an accountants’ report has been published.
Directors’ responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial Information
in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting
Guideline (“ AG”) 7 Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA”).
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-3 –


--- page 598 ---
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related
Services Engagements which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing
Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial information
used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to
those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus issued by the HKICPA. This standard requires that the
reporting accountants plan and perform procedures to obtain reasonable assurance about whether
the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with
paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any reports
or opinions on any historical financial information used in compiling the Unaudited Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the Unaudited Pro Forma Financial
Information.
The purpose of the Unaudited Pro Forma Financial Information included in the Prospectus is
solely to illustrate the impact of the global offering of shares of the Company on unadjusted
financial information of the Group as if the transaction had been undertaken at an earlier date
selected for purposes of the illustration. Accordingly, we do not provide any assurance that the
actual outcome of the transaction would have been as presented.
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-4 –


--- page 599 ---
A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by the Directors in the compilation of the
Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the
significant effects directly attributable to the transaction, and to obtain sufficient appropriate
evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Unaudited Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountants’ judgment, having regard to the
reporting accountants’ understanding of the nature of the Group, the transaction in respect of
which the Unaudited Pro Forma Financial Information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis
stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Certified Public Accountants
Hong Kong
27 February 2026
APPENDIX IIA UNAUDITED PRO FORMA FINANCIAL INFORMATION
– IIA-5 –


--- page 600 ---
The estimated consolidated profit attributable to owners of our Company for the year ended
December 31, 2025 is set out in “Financial Information” in this document.
A. BASES
Our Directors have prepared the estimate of the consolidated profit attributable to owners of
our Company for the year ended December 31, 2025 (the “ Profit Estimate ”) on the basis of (i) the
audited consolidated results of our Group for the nine months ended September 30, 2025; and (ii)
the unaudited consolidated results of our Group for the remaining three months ended December
31, 2025 based on the management accounts of our Group.
The Profit Estimate has been prepared on the basis of the accounting policies consistent in all
material respects with those currently adopted by our Group as summarised in the Accountants’
Report as set out in Appendix I to this Prospectus.
B. PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
On the basis set out in Appendix IIB to this Prospectus, and in the absence of unforeseen
circumstances, we estimate that our unaudited consolidated profit attributable to owners of our
Company for the year ended December 31, 2025 is as follows:
Estimated consolidated profit attributable to owners
of our Company ...........................
Not less than RMB140 million
APPENDIX IIB PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IIB-1 –


--- page 601 ---
C. LETTER FROM THE REPORTING ACCOUNTANTS
The following is the text of a letter , prepared for the inclusion in this Prospectus, received
from our reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong, in
connection with the estimate of the consolidated profit attributable to owners of our Company for
the year ended 31 December 2025.
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hong Kong
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27 February 2026
The Board of Directors
MeiG Smart Technology Co., Ltd.
China International Capital Corporation Hong Kong Securities Limited
Dear Sirs,
MeiG Smart Technology Co., Ltd. (“the Company”)
Profit estimate for year ended 31 December 2025
We refer to the estimate of the consolidated profit attributable to equity holders of the
Company for the year ended 31 December 2025 (“ the Profit Estimate ”) set forth in the section
headed “Financial Information” in the prospectus of the Company dated 27 February 2026 (“ the
Prospectus ”).
Directors’ responsibilities
The Profit Estimate has been prepared by the directors of the Company based on the audited
consolidated results of the Company and its subsidiaries (collectively referred to as “ the Group ”)
for the nine months ended 30 September 2025 and the unaudited consolidated results based on the
management accounts of the Group for the remaining three months ended 31 December 2025.
The Company’s directors are solely responsible for the Profit Estimate.
Our independence and quality management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the Hong Kong Institute of Certified Public
Accountants ( “HKICPA”), which is founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behavior.
APPENDIX IIB PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IIB-2 –


--- page 602 ---
Our firm applies Hong Kong Standard on Quality Management 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related
Services Engagements , which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
Reporting accountants’ responsibilities
Our responsibility is to express an opinion on the accounting policies and calculations of the
Profit Estimate based on our procedures.
We conducted our engagement in accordance with Hong Kong Standard on Investment
Circular Reporting Engagements 500 Reporting on Profit Forecasts, Statements of Sufficiency of
Working Capital and Statements of Indebtedness and with reference to Hong Kong Standard on
Assurance Engagements 3000 (Revised) Assurance Engagements Other Than Audits or Reviews of
Historical Financial Information issued by the HKICPA. Those standards require that we plan and
perform our work to obtain reasonable assurance as to whether, so far as the accounting policies
and calculations are concerned, the Company’s directors have properly compiled the Profit
Estimate in accordance with the bases adopted by the directors and as to whether the Profit
Estimate is presented on a basis consistent in all material respects with the accounting policies
normally adopted by the Group. Our work is substantially less in scope than an audit conducted in
accordance with Hong Kong Standards on Auditing issued by the HKICPA. Accordingly, we do not
express an audit opinion.
Opinion
In our opinion, so far as the accounting policies and calculations are concerned, the Profit
Estimate has been properly compiled in accordance with the bases adopted by the directors as set
out in Appendix IIB of the Prospectus and is presented on a basis consistent in all material
respects with the accounting policies normally adopted by the Group as set out in our accountants’
report dated 27 February 2026, the text of which is set out in Appendix I of the Prospectus.
Yours faithfully,
Certified Public Accountants
Hong Kong
APPENDIX IIB PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IIB-3 –


--- page 603 ---
D. LETTER FROM THE SOLE SPONSOR
The following is the text of a letter prepared for inclusion in the Prospectus (as defined
below) by the Sole Sponsor , in connection with the estimate of the consolidated profit attributable
to the owners of the parent for the year ended December 31, 2025.
February 27, 2026
The Board of Directors
MeiG Smart Technology Co., Ltd.ʮ̡
Dear Sirs,
We refer to the profit estimate of the consolidated profit attributable to owners of MeiG
Smart Technology Co., Ltd. (the “ Company ”) for the year ended December 31, 2025 (the “ Profit
Estimate ”) set forth in the section headed “Financial Information — Profit estimate for the year
ended December 31, 2025” in the prospectus of the Company dated February 27, 2026 (the
“Prospectus ”).
The Profit Estimate, for which you as the Directors of the Company are solely responsible
for, has been prepared by the Directors of the Company based on the audited consolidated results
of the Company and its subsidiaries (collectively, the “ Group ”) for the nine months ended
September 30, 2025 and the unaudited consolidated results based on the management accounts of
the Group for the three months ended December 31, 2025.
We have discussed with you the bases made by the Directors of the Company as set forth in
Part A of Appendix IIB to the Prospectus, upon which the Profit Estimate has been made. We have
also considered, and relied upon, the letter dated February 27, 2026 addressed to you and us from
Ernst & Young, the reporting accountants of the Company (the “ Reporting Accountants ”),
regarding the accounting policies and calculations upon which the Profit Estimate has been made.
On the basis of the information comprising the Profit Estimate and on the basis of the
accounting policies and calculations adopted by you and reviewed by the Reporting Accountants,
we are of the opinion that the Profit Estimate, for which you as the Directors of the Company are
solely responsible for, has been made after due and careful enquiry.
Yours faithfully,
For and on behalf of
China International Capital Corporation Hong Kong Securities Limited
W ANG Meng
Director
APPENDIX IIB PROFIT ESTIMATE FOR YEAR ENDED DECEMBER 31, 2025
– IIB-4 –


--- page 604 ---
TAXATION OF SECURITY HOLDERS
Income tax and capital gains tax of holders of the H shares is subject to the laws and
practices of mainland China and of jurisdictions in which holders of the H shares are resident or
otherwise subject to tax. The following summary of certain relevant taxation provisions is based
on current laws and practices, and has not taken into account the expected changes or amendments
to the relevant laws and policies and does not constitute any opinion or advice. The discussion
does not address all possible tax consequences relating to an investment in the H shares, nor does
it take into account the specific circumstances of any particular investor, some of whom may be
subject to special regulations. Accordingly, you should consult your own tax advisors regarding the
tax consequences of an investment in the H shares. The discussion is based upon laws and relevant
interpretations in effect as of the Latest Practicable Date, all of which are subject to change or
adjustment and may have retrospective effect.
This discussion does not address any aspects of mainland China taxation other than income
tax, capital gains tax and profits tax, sales tax, V AT, stamp duty and estate duty. Prospective
investors are urged to consult their financial advisors regarding the tax consequences of owning
and disposing of the H shares in mainland China and elsewhere.
Taxation in Mainland China
Tax on Dividends
Individual Investors
Pursuant to the Individual Income Tax Law of the PRC (),
or the Individual Income Tax Law, lastly amended by the SCNPC on 31 August 2018 and effective
on 1 January 2019, and the Implementation Rules of the Individual Income Tax Law of the PRC
(ૢԷ ) lastly amended by the State Council on 18 December
2018 and effective on 1 January 2019, dividends paid by mainland China companies to individual
investors are ordinarily subject to a withholding income tax levied at a flat rate of 20%.
Meanwhile, according to the Notice on Issues Concerning Differentiated Individual Income Tax
Policies on Dividends and Bonus of Listed Companies (੻
) jointly issued by the MOF, the SAT and the CSRC on 7 September 2015
and effective on 8 September 2015, where an individual holds the shares of a listed company
obtained from the public offering and market transfer, if the holding period is more than one year,
the dividends and bonus income shall be temporarily exempted from individual income tax. Where
an individual holds shares of a listed company from the public offering and market transfer, if the
holding period is within one month (inclusive), the dividend income shall be included in the
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 605 ---
taxable income in full; if the holding period is more than one month but less than one year
(inclusive), the dividend income shall be included in the taxable income at the rate of 50%; the
aforesaid income shall be subject to individual income tax at a uniform rate of 20%.
Pursuant to the Arrangement between the Mainland China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (ᅄ೼ձԣ˟ਊဍ೼
τર), or the Arrangement for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income, executed on 21 August 2006, the government may
impose tax on dividends paid by a company in mainland China to a Hong Kong resident (including
natural person and legal entity), but such tax shall not exceed 10% of the total amount of
dividends payable. If a Hong Kong resident directly holds 25% or more of the equity interests in a
company in mainland China and the Hong Kong resident is the beneficial owner of the dividends
and meets other conditions, such tax shall not exceed 5% of the total amount of dividends payable
by the company in mainland China. The Fifth Protocol to the Arrangement between the Mainland
China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on Income (׵< ʫή
τર >), or the Fifth
Protocol, issued by the SAT and effective on 6 December 2019 provides that such provisions shall
not apply to arrangements or transactions made for one of the primary purposes of obtaining such
tax benefits.
Enterprise Investors
Pursuant to the EIT Law, lastly amended by the SCNPC and effective on 29 December 2018,
and the Implementation Rules of the EIT Law of the PRC (ૢ
Է), or the Implementation Rules of the EIT Law, lastly amended by the State Council on 6
December 2024 and effective on 20 January 2025, a non-resident enterprise is subject to a 10%
EIT on mainland China-sourced income, including dividends paid by a PRC resident enterprise
that issues and lists shares in Hong Kong, if such non-resident enterprise does not have an
establishment or place of business in the mainland China or has an establishment or place of
business in the mainland China but the mainland China-sourced income is not actually connected
with such establishment or place of business in the mainland China. The aforesaid income tax
payable by non-resident enterprises shall be withheld at source, and the payer shall be the
withholding agent, and the tax shall be withheld by the withholding agent from the payment or due
payment every time it is paid or due. Such tax may be reduced or exempted pursuant to an
applicable treaty for the avoidance of double taxation.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 606 ---
Pursuant to the Notice on the Issues Concerning Withholding the EIT on the Dividends Paid
by Chinese Resident Enterprises to H Share Holders Which Are Overseas Non-resident Enterprises
(͏ΆุΣྤ̮ H )
issued by the SAT and effective on 6 November 2008, a PRC resident enterprise is required to
withhold EIT at a unified rate of 10% on dividends paid to non-PRC resident enterprise holders of
H shares which are derived from profit generated since 2008. The Reply on the Collection of EIT
on Dividends Received by Non-resident Enterprises from Holding B Shares and Other Shares ( ᗫ
͏Άุ՟੻ Bҭᔧ ), promulgated by the SAT on 24
July 2009 and effective on the same day, further provides that PRC-resident enterprises listed on
mainland China and overseas stock exchanges by issuing stocks must withhold EIT at a flat rate of
10% on dividends of 2008 and onwards that it distributes to non-resident enterprise shareholders.
Such tax rates may be further modified pursuant to the tax treaty or agreement that the PRC
government has concluded with a relevant country or region, where applicable.
According to the Arrangement for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income, the PRC government may impose tax on
dividends paid by a mainland China company to a Hong Kong resident (including natural person
and legal entity), but such tax shall not exceed 10% of the total dividends payable by the mainland
China company. If a Hong Kong resident directly holds 25% or more of equity interest in a
mainland China company and the Hong Kong resident is the beneficial owner of the dividends and
meets other conditions, such tax shall not exceed 5% of the total dividends payable by the
mainland China company. The Fifth Protocol provides that such provisions shall not apply to
arrangements or transactions made for one of the primary purposes of obtaining such tax benefits.
Pursuant to applicable regulations, we intend to withhold tax at a rate of 10% from dividends
paid to non-PRC resident enterprise holders of our H Shares (including HKSCC Nominees).
Non-PRC resident enterprises that are entitled to a reduced rate under an applicable income tax
treaty will be required to apply to the tax authorities in mainland China for a refund of any amount
withheld in excess of the applicable treaty rate, and payment of such refund will be subject to the
mainland China tax authorities’ verification.
Tax Related to Share Transfer Income
Individual Investors
Under the Individual Income Tax Law and its implementation rules, individuals are subject to
individual income tax at a rate of 20% on gains realized on the sale of equity interests in PRC
resident enterprises. Pursuant to the Circular on Continuing the Temporary Exemption of
Individual Income Tax on Gains from Share Transfers by Individuals (੻ᘱ
), which was promulgated by the MOF and the SAT on 30 March
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


--- page 607 ---
1998 and effective on the same day, from 1 January 1997, income of individuals from the transfer
of shares in listed companies continues to be temporarily exempted from individual income tax.
The SAT does not specify whether to continue to exempt individuals from individual income tax
on the income from the transfer of shares in listed companies in the newly revised EIT Law and
Implementation Rules of the EIT Law.
Enterprise Investors
Under the EIT Law and its implementation rules, a non-PRC resident enterprise is subject to
EIT at the rate of 10% with respect to mainland China-sourced income, including gains derived
from the disposal of shares in a mainland China resident enterprise, if it does not have an
establishment or place of business in the mainland China or has an establishment or place of
business in the mainland China but the mainland China-sourced income is not actually connected
with such establishment or place of business in the mainland China. The aforementioned income
tax payable by non-PRC resident enterprises is subject to source withholding, and the payer is the
withholding agent. The tax shall be withheld by the withholding agent from the payment or due
payment every time it is paid or due. Such tax may be reduced or exempted under the applicable
tax treaties or arrangements on the avoidance of double taxation.
Shanghai-Hong Kong Stock Connect Taxation Policy
Pursuant to the Notice on the Tax Policies Related to the Pilot Program of the Shanghai-Hong
Kong Stock Connect ( )
promulgated by the MOF, the SAT and the CSRC on 31 October 2014 and effective on 17
November 2014, transfer spread income derived by enterprises in mainland China from stock
investment listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect
shall be included in their total income and subject to EIT according to law. For dividends and
bonuses received by individual investors in mainland China from investing in H shares listed on
the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect, the H-share
companies shall apply to CSDCC for providing the register of individual investors in mainland
China to the H-share companies and withhold individual income tax at the rate of 20% on behalf
of the H-share companies.
Pursuant to the Announcement on the Continued Implementation of the Individual Income
Tax Policies on the Inter-connected Mechanisms for Trading on the Shanghai and Hong Kong
Stock Markets and for Trading on the Shenzhen and Hong Kong Stock Markets and on the Mutual
Recognition of Funds between the Mainland and Hong Kong (ୃ̹ఙ
ʮѓ ) which promulgated by
the MOF, the SAT and the CSRC on 4 December 2019 and implemented on 5 December 2019, and
the Announcement on Extending the Implementation of the Individual Income Tax Policies
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 608 ---
Concerning the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect
and the Mainland-Hong Kong Mutual Recognition of Funds (ୃ̹ఙ
ʮѓ ) which promulgated by
the MOF, the SAT and the CSRC on 21 August 2023 and implemented on the same day, the
transfer spread income derived by individual investors in mainland China from investing in shares
listed on the Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect shall be
exempted from individual income tax from 5 December 2019 to 31 December 2027.
Pursuant to the Notice on the Tax Policies Related to the Pilot Program of the Shanghai-Hong
Kong Stock Connect ( ),
dividends derived by enterprise investors in mainland China from investing in shares listed on the
Hong Kong Stock Exchange through Shanghai-Hong Kong Stock Connect are included in their
total income and subject to EIT according to law. Pursuant to which, dividend income obtained by
resident enterprises in mainland China from holding H shares for 12 consecutive months shall be
exempted from EIT according to law. H-share companies shall not withhold income tax on
dividends and bonus income for enterprise investors in mainland China. The tax payable shall be
declared and paid by the enterprise itself.
Shenzhen-Hong Kong Stock Connect Taxation Policy
Pursuant to the Notice on the Tax Policies Related to the Pilot Program of the
Shenzhen-Hong Kong Stock Connect (ٙ
) promulgated by the MOF, the SAT and the CSRC on 5 November 2016 and effective on 5
December 2016, transfer spread income derived by enterprise investors in mainland China from
stock investment listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock
Connect shall be included in their total income and subject to EIT according to law. For dividends
and bonuses received by individual investors in mainland China from investing in H shares listed
on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect, the H-share
companies shall apply to CSDCC for providing the register of individual investors in mainland
China to the H-share companies and the H-share companies shall withhold individual income tax
at the rate of 20% on behalf of the investors.
Pursuant to the Announcement on the Continued Implementation of the Individual Income
Tax Policies on the Inter-connected Mechanisms for Trading on the Shanghai and Hong Kong
Stock Markets and for Trading on the Shenzhen and Hong Kong Stock Markets and on the Mutual
Recognition of Funds between the Mainland and Hong Kong (ୃ̹ఙ
ʮѓ ) promulgated by the
MOF, the SAT and the CSRC on 4 December 2019 and effective on 5 December 2019, and the
Announcement on Extending the Implementation of the Individual Income Tax Policies Concerning
the Shanghai-Hong Kong Stock Connect and the Shenzhen- Hong Kong Stock Connect and the
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-5 –


--- page 609 ---
Mainland-Hong Kong Mutual Recognition of Funds (ʝ
ʮѓ ) which promulgated on 21
August 2023 and implemented on the same day, the transfer spread income derived by individual
investors in mainland China from investing in shares listed on the Hong Kong Stock Exchange
through Shenzhen-Hong Kong Stock Connect shall be exempted from individual income tax from
5 December 2019 to 31 December 2027.
Pursuant to the Notice on the Tax Policies Related to the Pilot Program of the
Shenzhen-Hong Kong Stock Connect (ٙ
), dividends derived by enterprise investors in mainland China from investing in shares
listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect are
included in their total income and subject to EIT according to law. In particular, dividends and
bonus income obtained by resident enterprises in mainland China from holding H shares for 12
consecutive months shall be exempted from EIT according to law. H-share companies shall not
withhold income tax on dividends and bonus income for enterprise investors in mainland China.
The tax payable shall be declared and paid by the enterprise itself.
Stamp Duty
Pursuant to the Stamp Duty Law of the PRC (), which was
promulgated by the SCNPC on 10 June 2021 and came into effect on 1 July 2022, the purchase
and disposal of H shares by non-mainland China investors outside of mainland China are not
subject to the requirements of the Stamp Duty Law of the PRC.
Estate Duty
Pursuant to the laws of mainland China, no estate duty is currently levied in mainland China.
MAJOR TAXATION OF OUR COMPANY IN MAINLAND CHINA
EIT
According to the EIT Law, enterprises and other income-generating organizations (hereinafter
collectively referred to as “ enterprises ”) within the territory of the mainland China are the
taxpayers of EIT and shall pay EIT in accordance with the provisions of the EIT Law, and the EIT
rate in the PRC is 25%.
Enterprises are classified into resident enterprises and non-resident enterprises. A
non-resident enterprise that does not have an establishment or place of business in the mainland
China, or has an establishment or place of business in the mainland China but the income has no
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-6 –


--- page 610 ---
actual connection to such establishment or place of business, shall pay EIT on its income within
the mainland China and withhold at source, where the payer is the withholding agent. The tax shall
be withheld by the withholding agent from the payment or due payment every time it is paid or
due. Meanwhile, any gains realized on the transfer of shares by such investors are subject to EIT
and shall be withheld at source if such gains are regarded as income derived from the transfer of
property within the mainland China.
VAT
Pursuant to the Provisional Regulations on Value-added Tax of the PRC ( ʕശɛ͏΍ձ਷ᄣ
೼ᅲБૢԷ) lastly amended by the State Council on 19 November 2017 and effective on the
same day and the Detailed Rules for the Implementation of the Provisional Regulations on
Value-added Tax of the PRC ( ) lastly amended by the
MOF on 28 October 2011 and effective on 1 November 2011, all entities and individuals in
mainland China engaging in the sale of goods, the provision of processing, repairs and replacement
services, and the importation of goods are required to pay V AT. For taxpayers selling or importing
goods, the general tax rate shall be 17% unless otherwise specified in the aforesaid regulations.
Pursuant to the Notice on the Adjustment to V AT Rates () (Cai
Shui [2018] No. 32), promulgated by the MOF and the SAT on 4 April 2018, and became effective
as of 1 May 2018, the V AT rates of 17% and 11% applicable to the taxpayers who have V AT
taxable sales activities or imported goods are adjusted to 16% and 10%, respectively.
Pursuant to the Announcement on Relevant Policies for Deepening V AT Reform (ଉʷ
ʮѓ) (2019 No. 39 of MOF, SAT and General Administration of
Customs), promulgated by the MOF, the SAT and the General Administration of Customs on 20
March 2019 and became effective on 1 April 2019, the V AT rates of 16% and 10% applicable to
the taxpayers who have V AT taxable sales activities or imported goods are adjusted to 13% and
9%, respectively.
FOREIGN EXCHANGE ADMINISTRATION
The lawful currency of mainland China is the Renminbi. The SAFE, authorized by the PBOC,
is empowered with the functions of administering all matters relating to foreign exchange,
including the enforcement of foreign exchange regulations.
Pursuant to the Regulations of the PRC on Foreign Exchange Control ( ʕശɛ͏΍ձ਷̮ි
၍ଣૢԷ) announced by the State Council on 5 August 2008 and effective on the same day, all
international payments and transfers are classified into current account items and capital account
items. Mainland China does not impose restrictions on international payments and transfers under
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-7 –


--- page 611 ---
current account items. Foreign exchange income from the current account of enterprises in
mainland China may be retained or sold to financial institutions engaged in the settlement and sale
of foreign exchange in accordance with relevant provisions of the State. The retention or sale of
foreign exchange receipts under capital accounts to financial institutions engaging in settlement
and sale of foreign exchange shall be subject to the approval of foreign exchange administrative
authorities, unless otherwise stipulated by the State.
Pursuant to the Regulations for the Administration of Settlement, Sale and Payment of
Foreign Exchange () promulgated by the PBOC on 20 June 1996
and became effective on 1 July 1996, the remaining restrictions on convertibility of foreign
exchange in respect of current account items are abolished while the existing restrictions on
foreign exchange transactions in respect of capital account items are retained.
Pursuant to relevant laws and regulations of the mainland China, mainland China enterprises
(including foreign-invested enterprises) which require foreign exchange for transactions relating to
current account items, may, without the approval of SAFE, effect payment from their foreign
exchange accounts at the designated foreign exchange banks, on the strength of valid receipts and
proof of transactions. Foreign-invested enterprises that need to distribute profits to their
shareholders in foreign exchange and Chinese enterprises that need to pay fixed dividends in
foreign exchange in accordance with the requirements shall pay from their foreign exchange
account or pay at the designated foreign exchange bank by a resolution of the board of directors
on the distribution of profits.
Pursuant to the Decision of the State Council on Canceling and Adjusting a Group of
Administrative Approval Items and Other Matters (ᄲҭධͦഃ
) promulgated by the State Council and effective on 23 October 2014, the
administrative approval of the SAFE and its branches on matters concerning the repatriation and
settlement of foreign exchange of overseas-raised funds through overseas listing has been
canceled.
Pursuant to the Circular of the SAFE on Relevant Issues Concerning the Foreign Exchange
Administration of Overseas Listing ( )
promulgated by the SAFE on 26 December 2014 and effective on the same day, the relevant
provisions on foreign exchange administration of domestic joint stock companies (hereinafter
referred to as “domestic companies”) listed overseas are as follows:
(i) The SAFE and its branches and the Foreign Exchange Management Department, or the
Foreign Exchange Bureau, supervise, manage and inspect the business registration,
account opening and use, cross-border income and expenditure, and capital exchange
involved in the overseas listing of domestic companies.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-8 –


--- page 612 ---
(ii) A domestic company shall, within 15 working days after the completion of the overseas
listing and issuance, register the overseas listing with the Foreign Exchange Bureau at
the place where it is registered with relevant material.
(iii) A domestic company (other than banking financial institutions) shall, by virtue of its
registration certificate for overseas listing business, open a “special foreign exchange
account for overseas listing of domestic companies” with a domestic bank for its initial
offering (or additional offering) and repurchase business to handle the remittance and
transfer of funds for the relevant business.
According to the Notice of the State Administration of Foreign Exchange on Further
Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment
( ) issued on 13 February
2015 and effective on 1 June 2015, the SAFE has cancelled the confirmation of foreign exchange
registration under domestic direct investment and the confirmation of foreign exchange registration
under overseas direct investment, instead, banks shall directly examine and handle foreign
exchange registration under domestic direct investment and foreign exchange registration under
overseas direct investment, and the SAFE and its branch offices shall indirectly regulate the
foreign exchange registration of direct investment through banks.
According to the Notice of the State Administration of Foreign Exchange of the PRC on
Revolutionize and Regulate Capital Account Settlement Management Policies (̮ි၍ଣ҅
 ) issued by the SAFE on 9 June 2016 and
effective on the same day, foreign currency earnings in capital account that relevant policies of
willingness exchange settlement have been clearly implemented on (including the recalling of
raised capital by overseas listing) may undertake foreign exchange settlement in the banks
according to actual business needs of the domestic institutions. The tentative percentage of foreign
exchange settlement for foreign currency earnings in capital account of domestic institutions is
100%, subject to adjustment by the SAFE in due time in accordance with international revenue and
expenditure situations.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-9 –


--- page 613 ---
This Appendix summarizes certain aspects of the PRC laws and regulations which are
relevant to our operations and business. Laws and regulations relating to taxation in the PRC are
discussed separately in “Appendix III — Taxation and Foreign Exchange” to this document. This
Appendix also contains a summary of laws and regulatory provisions of the Company Law of the
PRC () (the “ Company Law ”). The principal objective of this summary
is to provide potential investors with an overview of the principal laws and regulatory provisions
applicable to our Company. This summary is not intended to include all the information that is
important to potential investors. For a discussion of laws and regulations which are relevant to our
Company’s business, please see “Regulatory Overview” in this document.
The PRC Legal System
The PRC legal system is based on the Constitution of the PRC () (the
“Constitution ”) and is made up of written laws, administrative regulations, local regulations,
autonomous regulations, separate regulations, rules and regulations of departments of the State
Council, rules and regulations of local governments, autonomous regulations, separate regulations
of autonomous regions, special administrative region laws and international treaties and other
regulatory documents signed by the PRC government. Court decisions do not constitute legally
binding precedents, although they are used for the purposes of judicial reference and guidance.
Pursuant to the Constitution and the Legislation Law of the PRC (2023 Revision) ( ʕശɛ͏
جج2023͍)) (the “ Legislation Law ”), the National People’s Congress of the PRC
(the “ NPC”) and the Standing Committee of the National People’s Congress of the PRC (the
“SCNPC ”) are empowered to exercise the legislative power of the State. The NPC has the power
to formulate and amend the basic laws governing criminal and civil matters, State organs and other
matters. The SCNPC is empowered to formulate and amend laws other than those required to be
enacted by the NPC and to supplement and amend parts of the laws enacted by the NPC during the
adjournment of the NPC, provided that such supplements and amendments are not in conflict with
the basic principles of such laws.
The State Council is the highest organ of state administration and has the power to formulate
administrative regulations based on the Constitution and laws. The people’s congresses of
provinces, autonomous regions and municipalities and their respective standing committees may
formulate local regulations based on the specific circumstances and actual needs of their respective
administrative areas, provided that such local regulations do not contravene any provision of the
Constitution, laws or administrative regulations. The people’s congresses of cities divided into
districts and their standing committees may formulate local regulations with respect to urban and
rural construction and administration, ecological civilization construction, historical and cultural
protection, grassroots governance and other aspects according to the specific circumstances and
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 1–


--- page 614 ---
actual needs of such cities, provided that such local regulations do not contravene any provision of
the Constitution, laws, administrative regulations and local regulations of their respective
provinces or autonomous regions. If the law provides otherwise on the formulation of local
regulations by cities divided into districts, those provisions shall prevail. Such local regulations of
cities with districts will become enforceable after being reported to and approved by the standing
committees of the people’s congresses of the relevant provinces or autonomous regions.
The standing committees of the people’s congresses of the provinces or autonomous regions
shall examine the legality of local regulations submitted for approval, and such approval should be
granted within four months if they are not in conflict with the Constitution, laws, administrative
regulations and local regulations of such provinces or autonomous regions. Where, during the
examination for approval of local regulations of cities divided into districts by the standing
committees of the people’s congresses of the provinces or autonomous regions, conflicts are
identified with the rules and regulations of the people’s governments of the provinces or
autonomous regions concerned, a decision should be made by the standing committees of the
people’s congresses of provinces or autonomous regions to resolve the issue. People’s congresses
of national autonomous areas have the power to enact autonomous regulations and separate
regulations in the light of the political, economic and cultural characteristics of the nationality
(nationalities) in the areas concerned.
The ministries, commissions of the State Council, the People’s Bank of China, the National
Audit Office, institutions with administrative functions directly under the State Council, and other
institutions stipulated by law may formulate rules and regulations within the power of their
respective departments based on the laws, administrative regulations, decisions and rulings of the
State Council. Matters governed by the departmental rules and regulations should be those for the
enforcement of the laws, administrative regulations, decisions and rulings of the State Council.
The people’s governments of provinces, autonomous regions and municipalities directly under the
central government and cities divided into districts and autonomous regions may formulate rules,
in accordance with laws, administrative regulations and relevant local regulations of provinces,
autonomous regions and municipalities directly under the central government.
Pursuant to the Decision of the SCNPC Regarding the Strengthening of Interpretation of
Laws (Ӕᙄ ) passed on June 10, 1981,
issues related to the further clarification or supplement of laws or decrees should be interpreted by
the SCNPC or provided by with decrees, issues related to the application of laws in court trial
should be interpreted by the Supreme People’s Court, issues related to the application of laws in a
prosecution process should be interpreted by the Supreme People’s Procuratorate, and the
application of other laws and decrees in matters other than those involved in trial or prosecution
process should be interpreted by the State Council and the competent authorities. The State
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 2–


--- page 615 ---
Council and its ministries and commissions are also vested with the power to give interpretations
of the administrative regulations and departmental rules which they have promulgated. At the
regional level, the power to interpret regional laws and regulations is vested in the regional
legislative and administrative authorities which promulgate such laws and regulations.
The PRC Judicial System
Under the Constitution, the Law of Organization of the People’s Courts of the PRC (2018
revision) (ج2018ࠈࡌ)) and the Law of Organization of the
People’s Procuratorate of the PRC (2018 revision) (ج2018ࡌ
ࠈ)), the people’s courts of the PRC are classified into the Supreme People’s Court, the local
people’s courts at various levels, and other special people’s courts. The local people’s courts at
various levels are divided into three levels, namely, the primary people’s courts, the intermediate
people’s courts and the higher people’s courts. The primary people’s courts may set up certain
tribunals based on the status of the region, population and cases. The Supreme People’s Court shall
be the highest judicial organ of the state. The Supreme People’s Court shall supervise the
administration of justice by the local people’s courts at all levels and by the special people’s
courts. The people’s courts at higher levels shall supervise the judicial work of the people’s courts
at lower levels. The people’s procuratorates of the PRC are classified into the Supreme People’s
Procuratorate, local people’s procuratorates at various levels, and specialized people’s
procuratorates such as the Military Procuratorate. The Supreme People’s Procuratorate shall be the
highest procuratorial organ. The Supreme People’s Procuratorate shall direct the work of the local
people’s procuratorates at all levels and of the special people’s procuratorates. The people’s
procuratorates at higher levels shall direct the work of those at lower levels.
The people’s courts employ a two-instance trial system, and the judgments or rulings of the
second instance at the people’s courts are final. A party may appeal against the judgment or ruling
of the first instance of a local people’s courts. The people’s procuratorate may present a protest to
the people’s courts at the next higher level in accordance with the procedures stipulated by the
laws. In the absence of any appeal by the parties and any protest by the people’s procuratorate
within the stipulated period, the judgments or rulings of the people’s courts become final.
Judgments or rulings of the second instance of the intermediate people’s courts, the higher
people’s courts and the Supreme People’s Court and those of the first instance of the Supreme
People’s Court are final. However, if the Supreme People’s Court or the people’s courts at the next
higher level finds any definite errors in a legally effective final judgment or ruling of the people’s
court at a lower level, or if the president of a people’s court finds any definite errors in a legally
effective final judgment or ruling of such court, the case can be retried according to judicial
supervision procedures.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 3–


--- page 616 ---
The Civil Procedure Law of the PRC () (the “ Civil Procedure
Law”) adopted on April 9, 1991 and amended five times on October 28, 2007, August 31, 2012,
June 27, 2017, December 24, 2021 and September 1, 2023 prescribes the conditions for instituting
a civil action, the jurisdiction of the people’s courts, the procedures for conducting a civil action,
and the procedures for enforcement of a civil judgment or ruling. All parties to a civil action
conducted within the PRC must comply with the relevant provisions of the Civil Procedure Law.
Civil cases are generally heard by the courts where the defendants are located. The court of
jurisdiction in a civil action may be chosen by express agreement between the parties, provided
that the people’s court is located at a place that has direct connection with the dispute, such as the
plaintiff’s or the defendant’s place of domicile, the place where the contract is performed or
signed, the object of the action is located. However, the choice of the court cannot conflict with
the regulations of different jurisdictions and exclusive jurisdictions in any case.
A foreign individual, a person without nationality, a foreign enterprise and organization is
given the same litigation rights and obligations as a citizen, a legal person and other organization
of the PRC when initiating actions or defending against litigation at the people’s court. Should a
foreign court limit the litigation rights of citizens, a legal person, and other organizations of the
PRC, the people’s court of the PRC may apply the same limitations to the civil litigation rights to
citizens, enterprises and organizations of such foreign country. A foreign individual, a person
without nationality, a foreign enterprise and organization must engage a lawyer from mainland
China if such person needs to engage a lawyer for the purpose of initiating actions or defending
against litigations at the people’s court. In accordance with the international treaties to which the
PRC is a signatory or participant or according to the principle of reciprocity, a people’s court and
a foreign court may request each other to serve documents, conduct investigations and collect
evidence and take other actions on behalf of each other. A people’s court shall not accommodate
any request made by a foreign court which will result in the violation of sovereignty, security or
public interests of the PRC.
All parties to a civil action shall perform the legally effective judgments and rulings. If any
party to a civil action refuse to comply with a judgement or ruling made by a people’s court or an
award made by an arbitration tribunal in the PRC, the other party may apply to the people’s court
for enforcement within two years. Suspension or disruption of the time limit for applying for such
enforcement shall comply with the provisions of the applicable law concerning the suspension or
disruption of the time-barring of actions.
Where a party applies for enforcement of a legally effective judgement or ruling made by a
people’s court, and the opposite party or his property is not within the territory of mainland China,
the applicant may directly apply to a foreign court with jurisdiction for recognition and
enforcement of the judgement or ruling, or the people’s court may, in accordance with the
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 4–


--- page 617 ---
provisions of international treaties to which the PRC is a signatory or in which the PRC is a
participant or the principle of reciprocity, request recognition and enforcement by a foreign court.
Similarly, where an effective judgment or ruling made by a foreign court needs to be recognized
and enforced by the people’s court of the PRC, unless the people’s court considers that the
recognition or enforcement of the judgment or ruling would violate the basic legal principles of
the PRC, national sovereignty, national security or social and public interest, the parties involved
may directly apply to an intermediate people’s court of the PRC with jurisdiction for recognition
and enforcement, or the foreign court may, in accordance with the provisions of international
treaties entered into or acceded to by that country and the PRC or according to the principle of
reciprocity, request the people’s court to recognize and enforce it.
The Company Law of the PRC, the Trial Administrative Measures of the Overseas Securities
Offering and Listing by Domestic Enterprises and the Guidelines for the Articles of
Association of Listed Companies
The Company Law was adopted by the SCNPC on December 29, 1993 and came into effect
on July 1, 1994. It was successively amended on December 25, 1999, August 28, 2004, October
27, 2005, December 28, 2013, October 26, 2018 and December 29, 2023. The newly revised
Company Law was implemented on July 1, 2024.
On February 17, 2023, the China Securities Regulatory Commission (the “ CSRC”)
promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by
Domestic Enterprises ( ) (the “ Overseas Listing
Trial Measures ”), which came into effect on March 31, 2023 and is applicable to direct and
indirect overseas share subscription and listing of domestic companies, which also stipulates the
filing administrative measures and regulatory requirements for the overseas securities offering and
listing by domestic enterprises.
On March 28, 2025, the CSRC promulgated the latest amended Guidelines for the Articles of
Association of Listed Companies (ˏ) (the “ Guidelines for the Articles of
Association ”). According to the Overseas Listing Trial Measures and its supporting guidelines,
Guidelines for the Application of Regulatory Rules — Overseas Offering and Listing No. 1,
domestic enterprises that are directly listed overseas shall formulate its Articles of Association
with reference to the Guidelines for the Articles of Association and other relevant provisions of the
CSRC on main provisions of the Company Law, the Overseas Listing Trial Measures and the
Guidelines for the Articles of Association.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 5–


--- page 618 ---
General Provisions
A joint stock limited company refers to an enterprise legal person incorporated under the
Company Law with its registered capital divided into shares of equal par value. The liability of its
shareholders is limited to the amount of shares held by them and the liability of a company is
limited to the full value of all the property owned by it.
A company must conduct its business in accordance with laws and regulations as well as
public and commercial ethics, be honest and trustworthy and accept the supervision of the
government and the public. A company may invest in other companies. If it is prescribed by any
law that a company shall not become a capital contributor that shall bear the joint and several
liability for the debts of the enterprises it invests in, such provisions shall prevail.
Incorporation
A joint stock limited company may be incorporated by promotion or raising. A joint stock
limited company shall be incorporated by a minimum of one but not more than 200 promoters,
provided that at least more than half of the promoters must reside in mainland China. Where a
joint stock limited company is to be established by means of promotion, promoters shall fully
subscribe for the shares that shall be issued at the time of the establishment of the company as
provided for in the articles of association. If a joint stock limited company is to be established by
means of raising, the promoters shall subscribed for not less than 35% of the total shares that shall
be issued at the time of the establishment of the company as provided for in the articles of
association; however, where laws and administrative regulations provide otherwise, such
provisions shall prevail.
A prospectus shall be published, and a subscription letter shall be prepared when the
promoters offer shares to the public. The subscriber shall fill in the number of shares subscribed
for, amount and domicile and affix his/her signature or seal to the subscription letter. The
subscriber shall make full payment for the shares subscribed for. Where a promoter is offering
shares to the public, such an offer shall be underwritten by security companies established under
the PRC laws, and an underwriting agreement shall be concluded thereon. A promoter offering
shares to the public shall also enter into agreements with banks in relation to the receipt of
subscription monies. The receiving banks shall receive and keep in custody the subscription
monies, issue receipts to subscribers who have paid the subscription monies and furnish evidence
of receipt of those subscription monies to relevant authorities. After the share capital for a public
offering has been paid in full, a capital verification institution established under the PRC law must
be engaged to conduct capital verification and furnish a certificate thereof. Where the shares to be
issued have not been fully subscribed for at the time of the establishment of a company, or the
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 6–


--- page 619 ---
promoters fail to hold an establishment meeting within 30 days after the full payment has been
made for the shares to be issued, subscribers may claim against the promoters for refund of the
payment for shares plus the interest on the bank deposits for the same term. The promoters and
subscribers may not withdraw their share capital after they have made payment for the shares or
delivered non-monetary property as capital contributions, except that the shares have not been
fully subscribed for within the time limit, the promoters fail to hold the establishment meeting on
schedule, or the establishment meeting decides not to establish the company. The board of
directors shall, within 30 days after the end of the establishment meeting of the company,
authorize a representative to file an application for registration of establishment with the company
registration authority.
A company’s promoter shall be liable for the following: (i) the debts and expenses incurred in
the establishment process jointly and severally if the company cannot be established; (ii) the
refund of subscription monies paid by the subscribers together with interest at bank deposit rates
for the same period jointly and severally if the company cannot be established.
Share Capital
The promoters may make a capital contribution in currencies, or non-monetary assets such as
in kind or intellectual property rights, land use rights, stock rights or creditor’s rights which can be
appraised with monetary value and transferred lawfully, except for assets which are prohibited
from being contributed as capital by the laws or administrative regulations. If a capital
contribution is made in non-monetary assets, a valuation of the assets contributed must be carried
out pursuant to the provisions of the laws or administrative regulations on valuation without any
over-valuation or under-valuation. If there are provisions on the assessment of value in any law or
administrative regulation, such provisions shall prevail.
The issuance of shares shall be conducted in a fair and equitable manner. Each share of the
same class must carry equal rights. Shares issued at the same time and within the same class must
be issued on the same conditions and at the same price. The same price per share shall be paid by
any share subscriber. The issue price of par value stock may be based on the face value or exceed
the face value but shall not be lower than the face value.
Under the Company Law, a joint stock limited company shall maintain a shareholder register
which sets forth the following matters: (i) the name and domicile of each shareholder; (ii) the type
and quantity of subscribed shares for each shareholder; (iii) for stocks issued in paper form, the
serial numbers of stocks; (iv) the date on which each shareholder acquired the shares.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 7–


--- page 620 ---
Increase In Share Capital
Pursuant to the Company Law, an increase in the capital of a company by means of an issue
of new shares must be approved by shareholders in a shareholder’s meeting. The articles of
association or the shareholders’ meeting may authorize the board of directors to decide to issue not
more than 50% of the shares that have been issued within three years. However, if the capital
contributions are to be made using non-monetary property, they shall be subject to a resolution
made by the shareholders’ meeting. Where the board of directors is authorized and decides to issue
shares, and thus results in a change in the registered capital or the number of issued shares of the
company, the voting at the shareholders’ meeting may not be needed to revise such an item set
forth in the articles of association of the company. Where the articles of association or the
shareholders’ meeting of a company authorize the board of directors to decide on issuing new
shares, a resolution of the board of directors shall be adopted by two thirds of all the directors. In
addition, where a domestic enterprise issuing and listing overseas, the issuer shall file with the
CSRC in accordance with the Overseas Listing Trial Measures and submit a filing report, legal
opinions and other relevant materials, giving a true, accurate and complete account of
shareholders’ information and other information.
Reduction of Share Capital
The company shall reduce the registered capital in accordance with the following procedures
as stipulated in the Company Law: (i) the company shall prepare a balance sheet and an inventory
of properties; (ii) make a resolution at a shareholders’ meeting to reduce the registered capital; (iii)
the company shall notify its creditors within 10 days after making the resolution to reduce the
registered capital and publish the relevant announcement in newspapers or on the National
Enterprise Credit Information Publicity System within 30 days; (iv) a creditor may, within 30 days
after receipt of the notification, or within 45 days after the date of announcement if he/she has not
received the notification, have the right to request the company to repay its debts or provide
relevant guarantees; and (v) the company must apply to the company registration authority for a
change in registration.
Where a company reduces its registered capital, it shall reduce the amount of capital
contribution or shares in proportion to the capital contribution or shares held by the shareholders,
unless it is otherwise prescribed by any law, or is otherwise prescribed by the articles of
association of the company.
If a company still has losses after making up for them in accordance with the relevant
provisions of the Company Law, it may reduce its registered capital to make up for the losses. If
the registered capital is reduced to make up for the loss, the company shall not make any
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 8–


--- page 621 ---
distribution to the shareholders, nor shall the shareholders be exempted from their obligation to
pay the capital contribution or the share capital. If the registered capital is reduced in accordance
with the aforesaid provisions, the item (iii) and item (iv) mentioned above shall not apply, but the
resolution to reduce the registered capital shall be made by the shareholders’ meeting within 30
days from the date of the announcement in the newspapers or on the National Enterprise Credit
Information Publicity System. After a company reduces its registered capital in accordance with
the provisions of the preceding paragraphs, it shall not distribute profits until the accumulated
amount of statutory reserve and discretionary reserve reaches 50% of the company’s registered
capital.
When a company reduces its registered capital in violation of the provisions of the Company
Law, its shareholders shall refund the funds they have received, and if the capital contributions of
the shareholders are reduced or exempted, such capital contributions shall be restored to the
original status; if any loss is caused to the company, the shareholders and the liable directors and
senior management shall bear the liability for compensation.
Repurchase of Shares
Under the provisions of the Company Law, a company shall not repurchase its own shares
except in the following circumstances: (i) reduction of the registered capital of the company; (ii)
merger with another company that holds its shares; (iii) use of its shares for carrying out an
employee stock ownership plan or equity incentive plan; (iv) request from shareholders who object
to a resolution of a shareholders’ meeting on merger or division of the company to acquire their
shares by the company; (v) use of shares for conversion of convertible corporate bonds issued by
the listed company; and (vi) it is necessary for a listed company to maintain its company value and
protect its shareholders’ equity.
A resolution of a shareholders’ meeting is required for the repurchase of shares by a company
under either of the circumstances stipulated in item (i) or item (ii) above; for a company’s
repurchase of shares under any of the circumstances stipulated in item (iii), item (v) or item (vi)
above, a resolution of a meeting of the board of directors shall be made by more than two-thirds of
directors attending the meeting according to the provisions of the company’s articles of association
or as authorized by the shareholders’ meeting.
The shares acquired by the company according to the above provisions under the
circumstance stipulated in item (i) hereof a company shall be deregistered within 10 days from the
date of acquisition of shares; the shares shall be transferred or deregistered within six months if
the repurchase of shares is made under the circumstances stipulated in either item (ii) or item (iv);
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 9–


--- page 622 ---
and the shares in the company held in total by the company after the repurchase of shares under
any of the circumstances stipulated in item (iii), item (v) or item (vi) shall not exceed 10% of the
company’s total issued shares, and shall be transferred or deregistered within three years.
A company shall not accept its own shares as the subject matter of a mortgage.
No company may provide gifts, loans, guarantees or other financial aids for others to obtain
the shares of the company or the parent company thereof unless it carries out an employee stock
ownership plan. For the benefits of the company, the company may, upon a resolution by the
shareholders’ meeting or by the board of directors under the articles of association or the
authorization of the shareholders’ meeting, provide financial aids for others to obtain the shares of
the company or the parent company thereof, provided that the total accumulative amount of the
financial aids shall not exceed 10% of the total issued share capital. A resolution by the board of
directors shall be adopted by two thirds of all the directors.
Any director or senior management who is liable for any loss to the company due to violation
of the provisions of the preceding paragraph shall make compensation.
Transfer of Shares
The shares held by the shareholder of a company may be transferred according to the law.
Where the articles of association have any restriction on the transfer of shares, the transfer shall be
carried out in accordance with the articles of association. Under the Company Law, a shareholder
should affect a transfer of his shares on the stock exchange established in accordance with the law
or by any other means as required by the State Council. The transfer of shares by a shareholder
must be conducted by means of endorsement or by other means stipulated by laws or by
administrative regulations. Following the transfer of shares, the company shall enter the names and
domiciles of the transferee into its share register. The change of the register of members described
in the preceding paragraph shall not be registered within 20 days before the convening of a
shareholders’ meeting or 5 days prior to the base date on which the company decides to distribute
dividends. However, where it is otherwise provided for in any law, administrative regulation or by
the securities regulatory authority of the State Council for the modification of the register of
shareholders of a listed company, such provisions shall prevail.
Pursuant to the Company Law, shares of the company issued prior to the public issue of
shares may not be transferred within one year of the date of the company’s listing on the stock
exchange. Where it is otherwise provided for in any law, administrative regulation or by the
securities regulatory authority of the State Council for the transfer of shares held by the
shareholders or actual controllers of a listed company, such provisions shall prevail. Directors and
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-10 –


--- page 623 ---
senior management of the company shall declare to the company the shares they hold and the
changes thereof during the term of office as determined when they assume the posts, the shares
transferred each year shall not exceed 25% of the total shares they hold of the company. They
shall not transfer the shares they hold within one year of the date of the company’s listing on the
stock exchange, nor within six months after they leave their positions in the company. The articles
of association may set out other restrictive provisions in respect of the transfer of shares in the
company held by its directors and the senior management.
Where the shares are pledged within the time limit for restricted transfer as provided for by
laws and administrative regulations, the pledge may not exercise the pledge right within such
restricted period.
Shareholders
Pursuant to the Company Law and the Guidelines for Articles of Association, the rights of
shareholders include the rights: (i) to be legally entitled to assets income, participate in significant
decision-making and select management personnel; (ii) to petition the people’s court to revoke any
resolution of a shareholders’ meeting or a meeting of the board of directors that has been convened
or whose voting has been conducted in violation of the laws, administrative regulations or the
articles of association of the company, or any resolution the contents of which is in violation of
the laws, administrative regulations or the articles of association of the company, provided that
such petition shall be submitted to the people’s court within 60 days of the passing of such
resolution; (iii) to transfer his/her shares legally; (iv) to attend or appoint a proxy to attend
shareholders’ meeting and exercise the voting rights; (v) to inspect and copy the articles of
association of the company, share register, the minutes of shareholders’ meeting, board resolutions,
resolutions of the audit committee and the financial and accounting reports, and to make
suggestions or inquiries in respect of the company’s operations; (vi) to receive dividends in respect
of the number of shares held; (vii) to participate in the distribution of residual properties of the
company in proportion to their shareholdings upon the liquidation of the company; and (viii) any
other shareholders’ rights conferred by laws, administrative regulations and the articles of
association.
The obligations of shareholders include the obligation to abide by the articles of association
of the company, to pay the subscription monies in respect of the shares subscribed for, to be liable
for the company’s responsibilities in respect of the shares taken up by them and any other
shareholder obligation specified in the articles of association of the company.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 1 1–


--- page 624 ---
Shareholders’ meeting
The shareholders’ meeting is the organ of authority of the company, which exercises its
powers in accordance with the Company Law. The shareholders’ meeting may exercise its powers:
(i) to elect or replace the directors and to decide on their remunerations; (ii) to consider and
approve the reports of the board of directors; (iii) to consider and approve the company’s profit
distribution and loss recovery proposals; (iv) to decide on any increase or reduction of the
company’s registered capital; (v) to decide on the issue of corporate bonds; (vi) to decide on
merger, division, dissolution and liquidation of the company or change of its corporate form; (vii)
to amend the articles of association of the company; and (viii) to exercise any other authority
stipulated in the articles of association of the company.
The shareholders’ meeting may authorize the board of directors to make resolutions on the
issuance of corporate bonds.
Pursuant to the Company Law and the Guidelines for Articles of Association, annual
shareholders’ meeting is required to be held once a year within six months after the end of the
previous accounting year. An interim shareholders’ meeting is required to be held within two
months upon the occurrence of any of the following: (i) the number of directors is less than the
number required by the law or less than two-thirds of the number specified in the articles of
association of the company; (ii) the total outstanding losses of the company amounted to one-third
of the company’s total capital stock; (iii) shareholders individually or in aggregate holding 10% or
more of the company’s shares request to convene an interim shareholders’ meeting; (iv) the board
of directors deems necessary; (v) the audit committee so proposes; or (vi) any other circumstances
as provided for in the articles of associations of the company.
Shareholders’ meeting shall be convened by the board of directors and presided over by the
chairman of the board of directors. In the event that the chairman is incapable of performing or is
not performing his or her duties, the meeting shall be presided over by the vice chairman. If the
vice chairman is incapable of performing or is not performing his or her duties, a director jointly
recommended by more than half of directors shall preside over the meeting. If the board of
directors is unable to or fails to perform its duty of convening the shareholders’ meeting, the audit
committee shall convene and preside over such meeting in a timely manner; if the audit committee
fails to convene and preside over such meeting, shareholders who individually or jointly hold more
than 10% of the company’s shares for more than 90 consecutive days may independently convene
and preside over such meeting. If the shareholders who individually or jointly hold more than 10%
of the shares of the company request to convene an interim shareholders’ meeting, the board of
directors and the audit committee shall, within 10 days after the receipt of such request, decide
whether to hold an interim shareholders’ meeting and reply to the shareholders in writing.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-12 –


--- page 625 ---
In accordance with the Company Law, a notice stating the time and venue of the meeting and
the matters to be considered at the meeting shall be given to all shareholders 20 days before the
meeting if the shareholders’ meeting is convened. Notice of the interim shareholders’ meeting shall
be given to all shareholders 15 days before the meeting. Shareholders who individually or jointly
hold more than one percent of the shares of the company may submit an interim proposal in
writing to the board of directors ten days before the shareholders’ meeting is held. The board of
directors shall notify other shareholders within two days upon receipt of the proposal, and submit
the interim proposal to the shareholders’ meeting for deliberation, unless the interim proposal is in
violation of any law, administrative regulation or the articles of association or fails to fall into the
scope of functions of the shareholders’ meeting. The company shall not raise the shareholding
proportion of the shareholder who brings forward any interim proposal. A company offering shares
to the public shall make the notices as mentioned in the preceding paragraphs by way of
announcement. The shareholders’ meeting shall not make any resolution on any matter not
specified in the notice.
According to the Company Law, shareholders present at shareholders’ meeting shall have one
vote for each share they hold, except the shareholders of classified shares. The company may not
have a voting right for the shares it holds.
The cumulative voting system may be adopted for the election of directors at the
shareholders’ meeting in accordance with the provisions of the articles of association or the
resolutions of the shareholders’ meeting. Under the accumulative voting system, each share shall
have the same number of voting rights as the number of directors to be elected at the shareholders’
meeting, and shareholders may consolidate their voting rights when casting a vote.
Under the Company Law, the passing of any resolution at the shareholder’s meeting requires
affirmative votes of shareholders representing more than half of the voting rights held by the
shareholders who attend the shareholder’s meeting except in cases of proposed amendments to a
articles of association, increase or decrease of registered capital, merger, division or dissolution, or
change of corporation form, which require affirmative votes of shareholders representing more
than two-thirds of the voting rights held by the shareholders who attend the shareholder’s meeting.
Minutes shall be prepared in respect of matters considered at the shareholders’ meeting and
the chairperson and directors attending the meeting shall endorse such minutes by signature. The
minutes shall be kept together with the shareholders’ attendance register and the proxy forms.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-13 –


--- page 626 ---
Board of Directors
A joint stock limited company shall have a board. However, a joint stock limited company
with a relatively small scale or relatively small number of shareholders may dispense with the
board of directors and have one director to exercise the functions and powers of the board of
directors as prescribed by the Company Law. If the board of directors of a company has more than
three members, it may include an employees’ representative of the company. The employees’
representatives in the board of directors shall be democratically elected by the employees through
the employees’ representative congress, employees’ congress or by other means.
The term of office of directors shall be provided for by the articles of association, but each
term of office shall not exceed three years. Directors may serve consecutive terms if re-elected.
Under the Company Law, the board of directors may exercise the following powers: (i) to
convene shareholders’ meeting and report on its work to the shareholders’ meeting; (ii) to
implement the resolutions passed by the shareholders at the shareholders’ meeting; (iii) to decide
on the company’s operational plans and investment proposals; (iv) to formulate the company’s
proposals for profit distribution and for recovery of losses; (v) to formulate proposals for the
increase or reduction of the company’s registered capital and the issue of corporate bonds; (vi) to
formulate proposals for the merger, division, dissolution of the company or change in the form of
the company; (vii) to decide on the setup of the company’s internal management organs; (viii) to
decide on appointment or dismissal the manager of the company and his/her remuneration matters,
and as nominated by the manager, to decide on appointment or dismissal the company’s deputy
general manager and financial officer and his/her remuneration matters; (ix) to formulate the
company’s basic management system; and (x) other authority stipulated in the articles of
association or granted by the shareholders’ meeting.
Any restrictions on the functions and powers of the board of directors set out in the articles
of association may not be asserted against any bona fide third party.
Under the Company Law, a company may, under the articles of association, set up an audit
committee composed of directors in the board of directors, which shall exercise the functions and
powers of the board of supervisors. The audit committee shall be composed of at least 3 members,
and more than half of the members shall not assume any position other than the director in the
company and shall not have any relationship with the company that may affect their independent
and objective judgments. Among the members of the board of directors of the company, an
employee’s representative may become a member of the audit committee. A resolution made by the
audit committee shall be adopted by more than half of the members thereof. For voting on a
resolution of the audit committee, each member shall have one vote. The discussion methods and
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-14 –


--- page 627 ---
voting procedures of the audit committee shall be prescribed in the articles of association, unless it
is otherwise provided under the Company Law. A company may set up other committees in the
board of directors under the articles of association.
Meeting of the board of directors shall be convened at least twice a year. Notice of meeting
shall be given to all directors and audit committee members 10 days before the meeting. Interim
board meeting may be proposed to be convened by shareholders representing more than one-tenth
of the voting rights, more than one-third of the directors or the audit committee. The chairman
shall convene the meeting within 10 days of receiving such proposal, and preside over the board
meeting. The board of directors may otherwise determine the method of giving notice and notice
period for convening an interim meeting of the board of directors.
No meeting of the board of directors may be held unless more than half of the directors are
present. A resolution made by the board of directors shall be adopted by more than half of all the
directors. For voting on a resolution of the board of directors, each director shall have one vote.
The board of directors shall prepare minutes regarding the decisions on the matters discussed at
the meetings, which shall be signed by the directors present.
The directors shall attend the meeting of the board of directors in person. Where any director
is unable to attend the meeting for any reason, he/she may, by issuing a written power of attorney,
entrust another director to attend the meeting on his/her behalf. The power of attorney shall
indicate the scope of authorization. The directors shall be responsible for the resolutions made by
the board of directors. Where a resolution of the board of directors is in violation of any law,
administrative regulation, article of association or resolution of the shareholders’ meeting and
causes any serious loss to the company, the directors who participate in adopting such resolution
shall be liable for compensation to the company. If a director is proved to have expressed his/her
objection to the voting on such a resolution and such objection has been recorded in the minutes,
he/she may be exempted from liability.
Under the Company Law, the following person may not serve as a director of the company:
(i) devoid of or with restricted civil conduct ability; (ii) within five years after serving sentence
for embezzlement, bribery, infringement or misappropriation of property, or for jeopardizing
socialist market economic order, or within five years after serving sentence and being deprived of
political rights for crime; within two years after being pronounced for suspension of sentence since
the expiration of the suspension of sentence; (iii) within three years after insolvency and
liquidation of such company or enterprise where the person acted as a director, factory manager or
business manager and has been held accountable for the insolvency; (iv) within three years after
company or enterprise the person acted as legal representative is revoked business license and
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-15 –


--- page 628 ---
ordered to shut down for violating law on which the person is held accountable; and (v) being
listed as a dishonest person subject to enforcement by the people’s court due to large amount of
unliquidated mature debts.
Where a company elects or appoints a director to which any of the above circumstances
applies, such election, appointment or designation shall be invalid. A director to which any of the
above circumstances apply during his/her term of office shall be released of his/her duties by the
company.
In addition, the Guidelines for Articles of Association further stipulates other circumstances
under which a person is disqualified from acting as a director of a company, including: (i) a person
who has been banned from the securities market by the CSRC where the relevant period remains
unexpired; or (ii) a person who is banned from doing so in accordance with other laws,
administrative regulations or departmental rules.
Under the Company Law, the Board shall appoint a chairman and may appoint a vice
chairman. The chairman and the vice chairman shall be elected with approval of more than half of
all the directors. The chairman shall convene and preside over board meeting and review the
implementation of board resolutions. The vice chairman shall assist the chairman to perform
his/her duties. Where the chairman is incapable of performing or is not performing his/her duties,
the duties shall be performed by the vice chairman. Where the vice chairman is incapable of
performing or is not performing his/her duties, a director nominated by more than half of the
directors shall perform his/her duties.
The Audit Committee
Under the Company Law, where a joint stock limited company does not have the board of
supervisor, the audit committee shall be composed of at least 3 members, and more than half of the
members shall not assume any position other than the director in the company and shall not have
any relationship with the company that may affect their independent and objective judgments.
Among the members of the board of directors of the company, an employee’s representative
may become a member of the audit committee. A resolution made by the audit committee shall be
adopted by more than half of the members thereof. For voting on a resolution of the audit
committee, each member shall have one vote. The discussion methods and voting procedures of the
audit committee shall be prescribed in the articles of association, unless it is otherwise provided
for by the Company Law. A company may set up other committees in the board of directors under
the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-16 –


--- page 629 ---
Manager and Senior Management
Pursuant to the relevant provisions of the Company Law, a company shall have a manager
who shall be appointed or removed by the board of directors. The manager shall be responsible for
the board of directors and exercise his/her functions and powers according to the articles of
association or the authorization of the board of directors. The manager shall attend the meeting of
the board of directors as a non-voting member.
According to the relevant provisions of the Company Law, senior management refers to the
manager, deputy manager, financial officer, secretary to the board of directors of a listed company
and other personnel as stipulated in the articles of association.
Duties of Directors, General Managers and Other Senior Management
Directors and senior management shall comply with laws, administrative regulations and the
articles of association.
Directors and senior management shall assume the obligation of loyalty to the company and
take measures to avoid conflict between their own interests and those of the company and may not
seek any improper interest by taking advantage of their powers. The directors and senior
management shall assume the duty of diligence to the company. When performing their duties,
they shall, for the best interests of the company, exercise the reasonable care that shall be
generally possessed by a manager.
The provisions of the preceding paragraphs shall apply to the controlling shareholder or
actual controller of a company who does not serve as a director but actually executes the affairs of
the company.
In the meantime, directors and senior management are prohibited from: (i) embezzling the
property or misappropriating the funds of the company; (ii) depositing company funds into
accounts under their own names or the names of other individuals; (iii) giving bribes or accepting
any other illegal proceeds by taking advantage of his/her power; (iv) accept commissions from
transactions between others and the company for their own benefits; (v) unauthorized divulgence
of confidential information of the company; and (vi) other acts in violation of their duty of loyalty
to the company.
A director or senior management who contravenes laws, administrative regulations or articles
of association in the performance of his/her duties resulting in any loss to the company shall be
liable to the company for compensation.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-17 –


--- page 630 ---
Where a director or senior management is required to attend a shareholders’ meeting, such
director or senior management shall attend the meeting and answer the inquiries from shareholders.
The audit committee may demand the directors or senior management to submit reports on the
performance of their duties. The directors and senior management shall truthfully provide relevant
information and materials to the audit committee, none of them may impede the exercise of powers
by the audit committee or audit committee members.
Where the directors and senior management violate laws, administrative regulations or the
articles of association in performance of duties to the company, thereby causing damages to the
company, the shareholders individually or jointly holding more than 1% of the shares in the
company for more than 180 consecutive days may request in writing the audit committee to initiate
proceedings in the people’s court.
Upon receipt of shareholders’ written request stipulated in the preceding paragraph, if the
audit committee or the board of directors refuses to file a lawsuit or does not file a lawsuit within
30 days from receipt of such request, or in the event of emergency where the interest of the
company will suffer irreparable damages if lawsuit is not filed immediately, the shareholders
stipulated in the preceding paragraph shall have the right to file a lawsuit directly with the
people’s court in their own name for the interest of the company. For other parties who infringe
the lawful interests of the company resulting in loss to the company, the aforementioned
shareholder(s) may institute litigation at a people’s court in accordance with the procedure
described above. Where any director or senior management violates the provisions of laws,
administrative regulations or the articles of association, damaging interests of shareholders, the
shareholders may file a lawsuit with the people’s court.
If a director or senior management of a wholly-owned subsidiary of the company violate
laws, administrative regulations or the articles of association in performance of duties to the
company, thereby causing damages to the company, or if the legitimate rights and interests of a
wholly-owned subsidiary of the company are impaired by any other person, thus causing any
losses, the shareholders of a limited liability company or shareholders of a joint stock limited
company individually and jointly holding 1% or more of the total shares of the company for 180
consecutive days or more may request the audit committee or the board of directors of the
wholly-owned subsidiary in written form to initiate a lawsuit in the people’s court or directly files
a lawsuit with the people’s court in their own name.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-18 –


--- page 631 ---
Finance, Accounting and Profit Distribution
According to the Company Law, a company shall establish its own financial and accounting
systems according to the laws, administrative regulations and the regulations of the financial
departments of the State Council. A company shall prepare its financial reports at the end of each
accounting year which shall be audited by an accounting firm according to the law. The financial
and accounting reports shall be prepared in accordance with the laws, administrative regulations
and the regulations of the financial departments of the State Council. The company’s financial and
accounting reports shall be made available for shareholders’ inspection at the company within 20
days before the convening of an annual shareholder’s meeting. A joint stock limited company that
makes public stock offerings shall announce its financial and accounting reports.
When distributing each year’s after-tax profits, the company shall set aside 10% of its
after-tax profits for the company’s statutory common reserve fund. However, when the cumulative
amount of the reserve fund has reached more than 50% of the PRC company’s registered capital, it
may no longer be allocated. When the company’s statutory common reserve fund is not sufficient
to make up for the company’s losses for the previous years, the current year’s profits shall first be
used to make up the losses before any allocation is set aside for the statutory common reserve
fund. After the company has made allocations to the statutory common reserve fund from its
after-tax profits, it may, upon passing a resolution at a shareholders’ meeting, make further
allocations from its after-tax profits to the discretionary common reserve fund. After the company
has made up its losses and made allocations to its discretionary common reserve fund, the
remaining after-tax profits shall be distributed to shareholders in proportion to the number of
shares held by the shareholders, except for those which are not distributed in a proportionate
manner as provided by the articles of association. Profits shall not be distributed for a company’s
shares held by this company.
Where a company distributes profits to shareholders in violation of the relevant provisions of
the Company Law, the shareholders shall refund the profits distributed to the company, and the
shareholders and the liable directors and senior management shall be held liable for compensation
if any loss is caused to the company.
If the shareholders’ meeting resolves to distribute profits, the board of directors shall do so
within six months after the resolution is made.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-19 –


--- page 632 ---
The premiums received by a company from the issuance of shares at an issue price in excess
of the par value of the shares, the amount of share proceeds from the issuance of no-par shares
that have not been credited to the registered capital, and other items required by the financial
department of the State Council to be included in the capital reserve shall be classified as the
capital reserve of the company.
The reserve of a company shall be used for making up losses, expanding the production and
business scale or increasing the registered capital of the company. Where the reserve of a company
is used for making up losses, the discretionary reserve and statutory reserve shall be firstly used. If
losses still cannot be made up, the capital reserve can be used according to the relevant provisions.
Where the statutory reserve is converted to increase registered capital, the amount of such reserve
retained shall not be less than 25% of the registered capital of the company prior to the
conversion.
The company shall have no accounting books other than the statutory books. The company’s
funds shall not be deposited in any account opened under the name of an individual.
After a company reduces its registered capital in accordance with the provisions of the
Company Law, it shall not distribute profits until the accumulated amount of statutory reserve and
discretionary reserve reaches 50% of the company’s registered capital.
Appointment and Dismissal of Auditors
Pursuant to the Company Law, the appointment or dismissal of an accounting firm
responsible for the auditing of the company shall be determined by shareholders at a shareholders’
meeting, the board of directors and the audit committee in accordance with the articles of
association. The accounting firm should be allowed to make representations when the
shareholders’ meeting, the board of directors and the audit committee conducts a vote on the
dismissal of the accounting firm. The company should provide true and complete accounting
evidence, accounting books, financial and accounting reports and other accounting information to
the engaged accounting firm without any refusal or withholding or misrepresentation of
information.
Amendment to Articles of Association
Pursuant to Company Law, the resolution of a shareholders’ meeting regarding any
amendment to a company’s articles of association requires affirmative votes by at least two-thirds
of the votes held by shareholders attending the meeting. According to the Guidelines for the
Articles of Association, if the amendments to the articles of association approved by the resolution
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-20 –


--- page 633 ---
of the shareholder’s meeting of shareholders are subject to approval by the competent authority,
they must be reported to the competent authority for approval; if they involve company
registration matters, the modification registrations shall be handled according to law. Where the
amendments to the articles of association belong to information required to be disclosed by laws
and regulations, such amendments shall be announced in accordance with the regulations.
Profit Distribution
Where a company distributes profits to shareholders in violation of the provisions of the
Company Law, the shareholders shall refund the profits distributed to the company, and the
shareholders, directors, supervisors, and senior management personnel who are responsible for
causing losses to the company shall bear compensation liability.
Dissolution and Liquidation
Pursuant to Company Law, a company shall be dissolved for any of the following reasons: (i)
upon expiry of term of business stipulated in the articles of association or occurrence of other
circumstances of dissolution stipulated in the articles of association; (ii) the shareholders’ meeting
has resolved to dissolve the company; (iii) the company is dissolved by reason of its merger or
division; (iv) the business license of the company is revoked or the company is ordered to close
down or to be dissolved in accordance with the laws; or (v) where the company encounters serious
difficulties in its operations or management that will lead to significant losses to the benefits of
the shareholders if the company continues its existence and the situation cannot be resolved by
other means, the company is dissolved by a people’s court in response to the request of
shareholders representing 10% or more of the voting rights of all shareholders of the company.
If any of the situations mentioned in the preceding paragraph arises, a company shall
publicize the situations through the National Enterprise Credit Information Publicity System within
ten days.
Where a company falls under the circumstances mentioned in items (i) or (ii) of the
paragraph above and it has not distributed the assets to its shareholders yet, it may survive by
modifying its articles of association or upon a resolution of the shareholders’ meeting.
To modify its articles of association or make a resolution of the shareholders’ meeting
according to the provisions of the preceding paragraph, the consent of two thirds or more of the
voting rights of the shareholders who attend the meeting of the shareholders’ meeting is required.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-21 –


--- page 634 ---
Where the company is dissolved under the circumstances set forth in item (i), (ii), (iv) or (v)
above, it shall be liquidated. The directors, who are the liquidation obligors of the company, shall
form a liquidation group to carry out liquidation within 15 days from the date of occurrence of the
cause of dissolution. The liquidation group shall be composed of the directors, unless it is
otherwise provided for in the company’s articles of association or it is otherwise elected by the
shareholders’ meeting.
The liquidation obligors shall be liable for compensation if they fail to fulfill their
obligations of liquidation in a timely manner, and thus any loss is caused to the company or the
creditors.
The liquidation committee may exercise following powers during the liquidation: (i) to verify
the Company’s assets and to prepare a balance sheet and an inventory of assets; (ii) to inform
creditors by notice or announcement; (iii) to deal with and settle any outstanding business of
relevant company; (iv) to pay all outstanding taxes and the taxes arising during the liquidation
process; (v) to settle claims and debts; (vi) to distribute the company’s remaining assets after its
debts have been paid off; and (vii) to represent the company in civil lawsuits.
The liquidation committee shall notify the company’s creditors within 10 days of its
establishment, and publish an announcement in newspapers or on the National Enterprise Credit
Information Publicity System within 60 days.
A creditor shall lodge his claim with the liquidation committee within 30 days of receipt of
the notification or within 45 days of the date of the announcement if he has not received any
notification.
The creditors shall explain matters relating to their claims and provide evidential documents.
The liquidation committee shall register the creditor’s claims. In the claims declaration period, the
liquidation committee shall not make repayment to the creditors.
Upon disposal of the company’s property and preparation of the required balance sheet and
inventory of assets, the liquidation committee shall draw up a liquidation plan and submit this plan
to a shareholders’ meeting or a people’s court for endorsement. The remaining part of the
company’s assets, after payment of liquidation expenses, employee wages, social insurance fees
and statutory compensation, outstanding taxes and the company’s debts, shall be distributed to
shareholders in proportion to shares held by them. The company shall continue its existence during
the liquidation period, although it cannot conduct operating activities that are not related to the
liquidation. The company’s property shall not be distributed to shareholders before repayments are
made in accordance with the requirements described above.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-22 –


--- page 635 ---
Where the liquidation group finds that the property of the company is not sufficient for
paying off the debts after liquidating the property of the company and preparing a balance sheet
and an inventory of property, it shall file an application to a people’s court for bankruptcy
liquidation. After the people’s court accepts the application for bankruptcy, the liquidation group
shall hand over the liquidation matters to the bankruptcy administrator designated by the people’s
court.
The members of the liquidation group performing their duties of liquidation are obliged to
loyalty and diligence. Any member of the liquidation group who neglects to fulfill his/her
liquidation duties, thus causing any loss to the company shall be liable for compensation, and any
member of the liquidation group who causes any loss to any creditor due to his/her intentional or
gross negligence shall be liable for compensation.
Upon completion of the liquidation of the company, the liquidation group shall produce a
liquidation report, report the same to the shareholders’ meeting or the people’s court for
confirmation, and submit the same to the company registration authority to apply for deregistration
of the company.
Where, during the period of survival, a company has not incurred any debts or has paid off
all the debts, the company may, upon the commitment of all the shareholders, be deregistered
under the summary procedures according to the relevant provisions. The deregistration of a
company under the summary procedures shall be announced through the National Enterprise Credit
Information Publicity System for a period of no less than 20 days. If there is no objection after the
expiry of the announcement period, the company may apply for deregistration of the company with
the company registration authority within 20 days.
For a company deregistered under the summary procedures, its shareholders shall be jointly
and severally liable for the debts incurred before the deregistration if they have made an untrue
commitment.
Where, after three years since the business license of a company is revoked, or the company
is ordered to close down or is revoked, the company fails to apply for its deregistration with the
company registration authority, the said authority may announce the company’s deregistration
through the National Enterprise Credit Information Publicity System for a period of no less than
60 days. If there is no objection after the announcement period expires, the company registration
authority may deregister the company. Such deregistration of a company will not affect the
liability of the original shareholders or liquidation obligors.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-23 –


--- page 636 ---
Overseas Listing
According to the Overseas Listing Trial Measures, the securities refer to stocks, depositary
receipts, and corporate bonds that can be converted into stocks or other securities of an equity
nature that are directly or indirectly offered and listed overseas by domestic enterprises. The direct
overseas offering and listing of domestic enterprises refer to such overseas offering and listing of a
joint stock limited company incorporated in the territory of mainland China. The indirect overseas
offering and listing of domestic companies refer to such overseas offering and listing made in the
name of an offshore entity but based on the equity, assets, earnings, or other similar rights of a
domestic company that operates its main business domestically.
The Overseas Listing Trial Measures also provide the conditions for overseas offering and
listing. An overseas offering and listing are prohibited under any of the following circumstances:
(i) the listing and financing fall under specific prohibition in the laws, administrative regulations,
and relevant national provisions; (ii) the overseas offering and listing may constitute endangerment
to national security as reviewed and determined by competent authorities under the State Council
in accordance with law; (iii) the domestic company and its controlling shareholder(s), actual
controllers, have a criminal record in recent three years for corruption, bribery, encroachment of
assets, misappropriation of assets, or disruption of socialist market economy order; (iv) the
domestic company is under investigation according to law for suspected crimes or major violations
of laws and regulations, but no clear conclusions have been reached; (v) there are material
ownership disputes over the equities held by the controlling shareholders or the shareholders
whose actions are controlled by the controlling shareholders or actual controllers.
In addition, under the Overseas Listing Trial Measures, where a domestic company from
mainland China submits an application for initial public offering to competent overseas regulators
or overseas stock exchanges, such issuer must file with the CSRC within three business days after
such application is submitted.
In the event of the occurrence of any of the following material events after the overseas
offering and listing, the domestic companies from mainland China shall make a detailed report to
the CSRC within three working days after the occurrence and public announcement of the relevant
event: (i) change of control; (ii) being subject to investigation, punishment, or other measures by
overseas securities regulatory authorities or the relevant competent authorities; (iii) change of the
listing status or transfer of listing board; (iv) voluntary or compulsory termination of listing.
Pursuant to the Provisions on Strengthening the Confidentiality and Archives Administration
Concerning the Overseas Securities Offering and Listing by Domestic Enterprises(̋੶ྤʫ
 ), which was issued by the CSRC,
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-24 –


--- page 637 ---
Ministry of Finance, the National Administration of State Secrets Protection and the National
Archives Administration on February 24, 2023 and implemented since March 31, 2023, a domestic
enterprise that provides or through its overseas listed entity, publicly discloses or provides to
relevant individuals or entities including securities companies, securities service providers and
overseas regulators, any document and materials that contain state secrets or working secrets of
government agencies, shall first obtain approval from competent authorities according to law, and
files with the secrecy administrative department at the same level. A domestic enterprise that
provides accounting archives or copies of accounting archives to any entities including securities
companies, securities service providers and overseas regulators and individuals shall fulfill due
procedures in compliance with applicable national regulations.
Merger and Division
Pursuant to the Company Law, a merger agreement shall be signed by merging companies
and the companies involved shall prepare respective balance sheets and inventory of assets. The
companies shall within 10 days of the date of passing the resolution approving the merger notify
their respective creditors and publicly announce the merger in newspapers or on the National
Enterprise Credit Information Publicity System within 30 days. A creditor may, within 30 days of
receipt of the notification, or within 45 days of the date of the announcement if he has not
received the notification, request the company to settle any outstanding debts or provide relevant
guarantees. In case of a merger, the credits and debts of the merging parties shall be assumed by
the surviving or the new company.
In case of a division, the company’s assets shall be divided, and a balance sheet and an
inventory of assets shall be prepared. When a resolution regarding the company’s division is
approved, the company should notify all its creditors within 10 days of the date of passing such
resolution and publicly announce the division in newspapers or on the National Enterprise Credit
Information Publicity System within 30 days. The liabilities of the company which have accrued
prior to the division shall be jointly borne by the separated companies, unless otherwise stipulated
in the agreement in writing entered into by the company with creditors in respect of the settlement
of debts prior to division.
The PRC Securities Law, Regulations and Regulatory Regimes
The PRC has promulgated a series of regulations that relate to the issue and trading of shares
and disclosure of information. In October 1992, the State Council established the Securities
Committee and CSRC. The Securities Committee is responsible for coordinating the drafting of
securities regulations, formulating securities-related policies, planning the development of
securities markets, directing, coordinating, and supervising all securities related institutions in the
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-25 –


--- page 638 ---
PRC, and administering CSRC. The CSRC is the regulatory executive body of the Securities
Committee and is responsible for the drafting of regulatory provisions governing securities
markets, supervising securities companies, regulating public offerings of securities by the PRC
companies in the PRC or overseas, regulating the trading of securities, compiling securities-related
statistics and undertaking relevant research and analysis. In April 1998, the State Council
consolidated the above two departments and reformed the CSRC.
On April 22, 1993, the State Council promulgated the Provisional Regulations Concerning the
Issue and Trading of Shares (၍ଣᅲБૢԷ) governing the application and
approval procedures for public offerings of shares, issuance of and trading in shares, the
acquisition of listed companies, deposit, clearing, and transfer of shares, the disclosure of
information, investigation, penalties and dispute resolutions with respect to a listed company.
The Securities Law of the PRC () (the “ Securities Law ”) took
effect on July 1, 1999, and was revised as of August 28, 2004, October 27, 2005, June 29, 2013,
August 31, 2014, and December 28, 2019, respectively. The latest revised Securities Law took
effect on March 1, 2020. The Securities Law is the first national securities law in the PRC,
comprehensively regulating activities in the PRC securities market. It is divided into 14 chapters
and 226 articles, including the issue and trading of securities, takeovers by listed companies,
securities exchanges, securities companies, and the responsibilities of the securities registration
and settlement institutions and securities regulatory authorities. Article 224 of the Securities Law
provides that domestic enterprises issuing shares overseas directly or indirectly or listing their
shares overseas shall comply with the relevant provisions of the State Council. Currently, the issue
and trading of foreign-issued securities (including shares) are principally governed by the
regulations and rules promulgated by the State Council and CSRC.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-26 –


--- page 639 ---
Arbitration and Enforcement of Arbitral Awards
The Arbitration Law of the PRC () (the “ Arbitration Law ”) was
enacted by the SCNPC on August 31, 1994, which became effective on September 1, 1995, and
was amended on August 27, 2009, and September 1, 2017. The Arbitration Law is applicable to,
among other matters, economic disputes involving foreign parties where all parties had entered
into a written agreement to resolve disputes by arbitration before an arbitration committee
constituted in accordance with the Arbitration Law. The Arbitration Law provides that an
arbitration committee may, before the promulgation of arbitration regulations by the Arbitration
Association, formulate interim arbitration rules in accordance with the Arbitration Law and the
Civil Procedure Law. Where the parties have agreed to settle disputes by means of arbitration, a
people’s court will refuse to handle a legal proceeding initiated by one of the parties at such
people’s court unless the arbitration agreement is invalid.
Under the Arbitration Law and Civil Procedure Law, an arbitral award shall be final and
binding on the parties involved in the arbitration. If any party fails to comply with the arbitral
award, the other party to the award may apply to a people’s court for its enforcement. A people’s
court may refuse to enforce an arbitral award made by an arbitration commission if there is any
procedural irregularity (including irregularity in the composition of the arbitration committee, the
making of an award on matters beyond the scope of the arbitration agreement, or the jurisdiction
of the arbitration commission).
Any party seeking to enforce an award of a foreign affairs arbitral body of the PRC against a
party or whose property is not located within the PRC may apply to a foreign court with
jurisdiction over the case for recognition and enforcement of the award. Likewise, an arbitral
award made by a foreign arbitral body may be recognized and enforced by a PRC court in
accordance with the principle of reciprocity or any international treaties concluded or acceded to
by the PRC.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-27 –


--- page 640 ---
The PRC acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (the “ New Y ork Convention ”) adopted on June 10, 1958, pursuant to a resolution passed
by the SCNPC on December 2, 1986. The New York Convention provides that all arbitral awards
made in a state which is a party to the New York Convention shall be recognized and enforced by
other parties thereto subject to their rights to refuse recognition and enforcement under certain
circumstances, including where the enforcement of the arbitral award is against the public policy
of that state. At the time of the PRC’s accession to the New York Convention, the SCNPC declared
that (i) the PRC would only apply the New York Convention to the recognition and enforcement of
arbitral awards made in the territories of other parties based on the principle of reciprocity; and
(ii) the New York Convention will only be applied to disputes deemed under the PRC laws to be
arising from contractual or non-contractual mercantile legal relations.
An agreement has been reached between Hong Kong and the Supreme People’s Court of the
PRC for the mutual enforcement of arbitral awards. On June 18, 1999, the Supreme People’s Court
of the PRC adopted the Arrangement on Mutual Enforcement of Arbitral Awards between Mainland
and Hong Kong Special Administrative Region (ʝੂБ΀൒൒Ӕ
τર), which became effective on February 1, 2000. The Supreme People’s Court of the PRC
issued the Supplementary Arrangements on the Mutual Enforcement of Arbitral Awards between
the Mainland and the Hong Kong Special Administrative Region (޴
໾̂τર) on November 26, 2020, which went into effect on November 27,
2020. The arrangements reflect the spirit of the New York Convention. Pursuant to the
arrangements, awards made by the PRC arbitral authorities acknowledged by Hong Kong
arbitration rules can be enforced in Hong Kong, and Hong Kong arbitration awards are also
enforceable in mainland China. Where a court of the mainland China finds that enforcement in the
mainland China of the ruling made by the Hong Kong arbitral authority will violate public
interests of the mainland China, execution of the ruling may be ignored.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-28 –


--- page 641 ---
This Appendix mainly provides investors with an overview of the Articles of Association. As
the following information is in summary form, it does not contain all the information that may be
important to investors.
SHARES AND REGISTERED CAPITAL
The shares of the Company shall be issued in an open, fair and equal manner. Each share of
the same class shall rank pari passu with each other. Shares of a class in each issuance shall be
issued under the same terms and at the same price. Each of the shares shall be subscribed for at
the same price by any entity or individual.
INCREASE, DECREASE, REPURCHASE AND TRANSFER OF SHARES
Increase and Decrease of Shares
According to the operation and development needs of the Company, subject to the laws and
regulations, the Company may increase the capital by the following ways upon approval of
resolutions at the Shareholders’ general meeting:
(i) Public issuance of shares;
(ii) Non-public issuance of shares;
(iii) Distribution of bonus shares to existing shareholders;
(iv) Converting the reserve funds into share capital;
(v) Other means approved by the laws, administrative regulations or approved by the CSRC.
Our Company may decrease our registered share capital and shall comply with the procedures
stipulated in the Company Law of the PRC and the Articles of Association.
Repurchase of Shares
Company shall not to repurchase its own shares, unless otherwise under the circumstances:
(i) Reduce our Company’s registered capital;
(ii) Merger with other companies which hold our shares;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 1–


--- page 642 ---
(iii) Using the shares as an employee stock ownership plan or equity incentive plan;
(iv) Purchasing its shares from Shareholders who have voted against the resolutions on the
merger or division of the Company at a Shareholders’ general meeting upon their
request;
(v) Use of shares for conversion of convertible corporate bonds issued by the Company;
(vi) Necessary for the Company to maintain its value and protect the interests of the
shareholders.
If the share repurchase is made under the circumstances stipulated in (iii), (v) or (vi) above,
it shall be conducted by way of open centralized trading.
A resolution shall be passed at the Shareholders’ general meeting when the Company is to
repurchase its own shares under the circumstances (i) and (ii) set out above. In case of the
circumstances stipulated in (iii), (v) and (vi) above, a resolution of the Company’s Board shall be
passed by more than two-thirds of the Directors attending the Board meeting. After the Company
has repurchased its own shares in accordance with the circumstances above, the shares so
repurchased shall be canceled within ten days from the date of purchase (under the circumstance
set out in (i) above), or shall be transferred or canceled within six months (under the
circumstances set out in (ii) and (iv) above). If the Company repurchases its shares under the
circumstances set out in (iii), (v) and (vi) above, the total number of shares held by the Company
shall not exceed 10% of the total issued shares of the Company, and such shares shall be
transferred or canceled within three years.
Transfer of Shares
Shares of the Company that were issued prior to a public issue shall not be transferred within
one year from the date on which shares of the Company are listed and traded on the stock
exchange.
The Directors and senior management of the Company shall notify the Company of their
holdings of shares in the Company and the changes therein. The shares transferrable by them
during each year of their tenures shall not exceed 25% of their total holdings of shares in the
Company. The shares in the Company held by them shall not be transferred within one year from
the date on which the Company’s shares are listed for trading. The shares in the Company held by
them shall not be transferred within half a year from their departure from the Company. Where the
listing rules of the place where the Company’s shares are listed provide otherwise in respect of the
restrictions on the transfer, such rules shall prevail.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 2–


--- page 643 ---
Any gains from the sale of Company’s shares or other securities with an equity nature by the
Directors and senior management members or shareholders holding 5% or more of the Company’s
shares within six months after their purchase of the same, and any gains from the purchase of the
shares or other securities with an equity nature by any of the aforesaid parties within six months
after sale of the same shall be disgorged and paid to the Company, and the Board of Directors of
the Company shall be responsible for recovering such gains from the abovementioned parties.
However, the six-month time limit as set out above shall not apply to a securities company which
holds 5% or more of the Company’s shares as a result of its undertaking of the untaken shares in
an offer, nor to other circumstances specified by the China Securities Regulatory Commission
(CSRC).
Shares or other securities with the nature of equity held by Directors, senior management
members and individual shareholders as mentioned in the preceding paragraph include shares or
other securities with the nature of equity held by their spouses, parents or children, or held by
them by using other people’s accounts.
If the Board of Directors of the Company fails to comply with the above paragraph of this
Article, the Shareholders are entitled to request the Board of Directors to do so within 30 days. If
the Board of Directors of the Company fails to comply within the aforesaid period, the
Shareholders are entitled to initiate litigation directly in the People’s Court in their own names for
the interest of the Company. And if the Board of Directors fails to implement the provisions set
forth in this Article, the responsible Directors shall bear joint and several liability in accordance
with law.
SHAREHOLDERS AND SHAREHOLDERS’ GENERAL MEETINGS
Shareholders
The Company shall make a register of shareholders in accordance with evidentiary documents
provided by the securities registration authorities. The register of Shareholders is sufficient
evidence to prove that the Shareholders hold the Company’s Shares. The original register of
Shareholders of overseas listed foreign shares listed in Hong Kong is kept in Hong Kong and is
available for inspection by Shareholders, but the Company may suspend the registration of
Shareholders in accordance with applicable laws and regulations and the securities regulatory rules
of the place where the Company’s Shares are listed. Shareholders shall enjoy rights and assume
obligations according to the class of shares they hold. Shareholders holding shares of the same
class shall enjoy the same rights and assume the same obligations.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 3–


--- page 644 ---
The rights of our shareholders are as follows:
(i) To receive distribution of dividends and other forms of benefits according to the number
of shares held;
(ii) To legally require, convene, preside over, participate in or authorize proxies of
Shareholders to attend the General Meeting and exercise corresponding voting rights;
(iii) To supervise operational activities of our Company, provide suggestions or submit
queries;
(iv) To transfer, grant and pledge the Company’s shares held according to the provisions of
the laws, administrative regulations and the Articles of Association;
(v) To read the Articles of Association, the list of Shareholders, General Meeting minutes,
resolutions of meetings of the Board of Directors and financial and accounting reports;
Shareholders who meet the prescribed requirements may examine the Company’s
accounting books and vouchers;
(vi) To participate in the distribution of the remaining assets of our Company according to
the proportion of shares held upon our termination or liquidation;
(vii) To require our Company to acquire the shares from Shareholders voting against any
resolutions adopted at the General Meeting concerning the merger and division of the
Company;
(viii)Other rights conferred by laws, administrative regulations, regulations of the authorities,
regulatory rules where our Company’s shares are listed, or the Articles of Association.
Where any Shareholder demands to read the relevant information or obtain any of the
aforesaid materials, he shall submit to the Company written documents proving the class(es) and
number of shares he holds. The Company shall provide the relevant information or materials in
accordance with the Shareholder’s demand after verifying the Shareholder’s identity.
In the event that any resolution of the Shareholders’ general meeting or resolution of the
Board of Directors violates laws or administrative regulations, the Shareholder is entitled to
request the People’s Court to deem it as invalid. In the event that the convening procedure or
voting method of the Shareholders’ general meeting or the Board meeting violates any of laws,
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 4–


--- page 645 ---
administrative regulations or the Articles of Association, or any resolution of which violates the
Articles of Association, the Shareholder is entitled to request the People’s Court to overturn the
resolution within 60 days upon the resolution was adopted.
The obligations of Shareholders are as follows:
(i) To abide by laws, administrative regulations and the Articles of Association;
(ii) To provide Share capital according to the Shares subscribed for and Share participation
methods;
(iii) Not to return Shares unless prescribed otherwise in laws and administrative regulations;
(iv) Not to abuse Shareholders’ rights to infringe upon the interests of the Company or other
Shareholders; not to abuse the Company’s status as an independent legal entity or the
limited liability of Shareholders to damage the interests of the Company’s creditors;
(v) To perform other duties prescribed in laws, administrative regulations and the Articles
of Association.
Any company Shareholder who abuses Shareholders’ rights and causes the Company or other
Shareholders to suffer a loss shall be liable for making compensation in accordance with the law.
Any Shareholder who abuses the status of the Company as an independent legal entity or the
limited liability of Shareholders to evade debts and seriously damages the interests of the
Company’s creditors shall assume joint and several liability for the Company’s debts.
In the event of any loss caused to our Company as a result of violation of any laws,
administrative regulations or Articles of Association by the Directors or senior management
outside the Audit Committee when performing their duties in our Company, the Shareholders
holding more than 1% shares separately or jointly for over 180 consecutive days may submit a
written request to the Audit Committee to file an action with the people’s court. Where members
of the Audit Committee violate laws, administrative regulations or the Articles of Association in
their duty performance and cause loss to our Company, the Shareholders may submit a written
request to the Board of Directors to file an action with the people’s court.
In the event that the Audit Committee or the Board of Directors refuse to file an action upon
receipt of the Shareholders’ written request specified in the preceding paragraph, or fail to file an
action within 30 days upon receipt thereof, or in the event that the failure to immediately file an
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 5–


--- page 646 ---
action in an emergency case will cause irreparable damage to the interests of our Company, the
Shareholder(s) specified in the preceding paragraph may, in their own name, directly file an action
to the court for the interest of our Company.
In the event of any other person infringes upon the legitimate rights and interests of our
Company and causes losses thereto, the shareholder(s) specified in this Articles of Association may
file an action with the court pursuant to the provisions of the preceding two paragraphs.
In the event of a director or senior management person violates laws, administrative
regulations or our Company’s Articles of Association, thereby damaging the interests of the
Shareholder(s), the Shareholder(s) may file an action with the court.
The controlling Shareholders and actual controllers of the Company shall not use their
connected relationship to damage the legitimate interests of the Company; those who violate
Articles of Association and cause losses to the Company shall be liable for compensation.
Controlling Shareholders and ultimate controllers of the Company shall have a duty of care to
the Company and public shareholders. Controlling Shareholders shall exercise their investors’
rights in strict accordance with the law and shall not damage the lawful interests of the Company
or of public Shareholders in any way such as via the distribution of profits, an asset
reorganization, external investments, the use of Company’s funds or the provision of a loan
guarantee, nor shall they abuse their controlling positions to damage the interests of the Company
or of public shareholders.
General Provisions for Shareholders’ General Meetings
The Shareholders’ general meeting is the organ of authority of the Company, which exercises
its powers in accordance with the law:
(i) To elect or remove the Directors and to decide on matters relating to the remuneration
of Directors;
(ii) To examine and approve reports of the Board of Directors;
(iii) To examine and approve the Company’s proposals for profit distribution plans and loss
recovery plans;
(iv) To decide on any increase or decrease of the Company’s registered capital;
(v) To decide on the issue of corporate bonds by the Company;
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--- page 647 ---
(vi) To decide on matters such as merger, division, dissolution and liquidation or change of
corporate form of the Company;
(vii) To amend the Articles of Association;
(viii)Resolution on appointment and dismissal of an accounting firm by the Company;
(ix) To examine and approve the provision of guarantees stipulated in Article 45;
(x) To examine matters relating to the purchases and disposals of the Company’s material
assets within one year, which exceed 30% of the Company’s latest audited total assets;
(xi) To examine and approve matters relating to changes in the use of proceeds;
(xii) To examine and approve the equity incentive plans and employee stock ownership plans;
(xiii)To examine and approve connected transactions between the Company and its connected
persons where the transaction amount exceeds RMB 30 million, and such amount
represents 5% or more of the absolute value of the Company’s most recently audited net
assets; (Excluded transactions: provision of guarantees by the Company, receipt of cash
assets as donations, and debt agreements solely for the purpose of reducing the
Company’s obligations);
(xiv) To examine and approve transactions stipulated in Article 44 (14) and Article 44 (15) of
the Company’s Articles of Association;
(xv) To examine other matters as required by the laws, administrative regulations,
departmental rules, the Articles of Association of the Company or the securities
regulatory rules of the place where the Company’s shares are listed, which shall be
decided by the Shareholders’ general meeting.
The following acts of external guarantee of the Company shall be submitted to the General
Meeting for deliberation and approval after deliberation and approval by the Board of Directors:
(i) Any guarantee to be provided after the total amount of external guarantees provided by
the Company and the subsidiaries it controls has at least or exceeded 50% of the
Company’s net assets as audited in the latest period;
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--- page 648 ---
(ii) Any guarantee to be provided after the total amount of external guarantees provided by
the Company and the subsidiaries it controls has at least or exceeded 30% of the
Company’s total assets as audited in the latest period;
(iii) Basis of the cumulative guarantee amount in the last 12 months, the total amount of
external guarantees provided by the Company has exceeded 30% of the Company’s
latest audited total assets in the latest period;
(iv) Any guarantee to be provided for a party whose ratio of liabilities to assets exceeds
70%;
(v) The single guarantee for an amount more than 10% of the Company’s net assets audited
in the latest period;
(vi) The guarantee to be provided to a Shareholder, or to an ultimate controller or related
party thereof;
(vii) Other guarantees required by the relevant laws or administrative regulations that shall be
considered by the Shareholders’ general meeting.
The guarantee in item (3) of the preceding paragraph shall be approved by special resolution
at the General Meeting.
The Company shall convene an extraordinary general meeting within two months from the
date of the occurrence of any of the following circumstances:
(i) The number of directors is less than the number provided for in the Company Law or
less than two-thirds of the number prescribed in these Articles of Association;
(ii) The uncovered losses of our Company reach one-third of its total paid-in share capital;
(iii) The Shareholders with 10% or more shares of the Company separately or jointly
request;
(iv) The Board of Directors considers it necessary;
(v) The Audit Committee proposes that such a meeting shall be held;
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--- page 649 ---
(vi) Other circumstances conferred by the laws, administrative regulations, departmental
rules, securities regulatory rules of the place where the Company’s shares are listed and
the Articles of Association.
Convening of Shareholders’ General Meetings
Shareholders who individually or collectively hold more than 10% of the shares of the
Company shall have the right to request the Board of Directors to convene an extraordinary
general meeting, and shall submit such request in writing to the Board of Directors. The Board of
Directors shall in accordance with the provisions of laws, administrative regulations, securities
regulatory rules of the place where the Company’s shares are listed and the Articles of Association,
provide written feedback on whether or not to convene the extraordinary general meeting within
10 days after receiving the request.
Where the Board of Directors agrees to convene an extraordinary general meeting, it shall
issue a notice of convening the general meeting within 5 days after the resolution of the Board of
Directors is made, and changes to the original request in the notice shall be subject to the consent
of the relevant shareholders. Where the Board of Directors does not agree to convene an
extraordinary general meeting, or fails to give feedback within 10 days after receiving the request,
shareholders who individually or collectively hold more than 10% of the Company’s shares have
the right to propose to the Audit Committee to hold an extraordinary general meeting, and shall
make a written request to the Audit Committee.
Where the Audit Committee agrees to convene an extraordinary general meeting, it shall issue
a notice of convening the general meeting within 5 days of receiving the request, and any changes
to the original request in the notice shall be subject to the consent of the relevant shareholders.
Where the Audit Committee fails to issue a notice of the general meeting within the prescribed
time limit, it shall be deemed that the Audit Committee has not convened and presided over the
general meeting, and shareholders who individually or collectively hold more than 10% of the
Company’s shares for more than 90 consecutive days may convene and preside over it on their
own.
Where the Audit Committee or shareholders decide to convene a Shareholders’ general
meeting by themselves, they shall notify the Board of Directors in writing and complete the
necessary reporting, announcement, or filing in accordance with securities regulatory rules of the
place where the Company’s shares are listed and the provisions of the stock exchange. Prior to the
announcement of the resolution of the Shareholders’ general meeting, the shareholding ratio of the
convening shareholders shall not be less than 10%. The Audit Committee or the convening
shareholders shall, in accordance with the securities regulatory rules of the place where the
Company’s shares are listed and the provisions of the stock exchange, complete the necessary
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--- page 650 ---
reporting, announcement, or filing, and submit relevant supporting documents to the stock
exchange. When issuing the notice of the general meeting and the announcement of the resolutions
of the Shareholders’ general meeting.
The expenses necessary for the Shareholders’ general meeting convened by the Audit
Committee or the shareholders themselves shall be borne by the Company.
Notice of Shareholders’ General Meeting
The notice of a Shareholders’ general meeting includes the following:
(i) The time, place and duration of the meeting;
(ii) The matters and proposals to be discussed at the meeting;
(iii) In plain language: all Shareholders have the right to attend the general meeting of
shareholders, and may entrust a proxy in writing to attend the meeting and vote. Such a
proxy does not need to be a shareholder of the Company;
(iv) The shareholding registration date of the Shareholders entitled to attend the general
meeting;
(v) name and telephone number of the permanent contact person for conference affairs;
(vi) The convener of the meeting;
(vii) The voting time and procedures for voting by network or other means.
The notice of the General Meeting and the supplementary notice shall fully and completely
disclose all the specific contents of all proposals. The start time of voting by network or other
means at the General Meeting shall not be earlier than 3:00 p.m. on the day before the on-site
General Meeting, nor later than 9:30 a.m. on the day of the on-site General Meeting, and the end
time shall not be earlier than 3:00 p.m. on the day of the on-site General Meeting.
The convener shall notify all Shareholders by way of announcement 21 days prior to the
convening of the annual general meeting, and each Shareholder shall be notified by way of
announcement 15 days prior to the convening of the extraordinary general meeting.
The interval between the equity registration date and the meeting date shall be no more than
7 working days. Once the equity registration date is confirmed, it cannot be changed.
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--- page 651 ---
Proposals at Shareholders’ General Meetings
The Board of Directors, the Audit Committee and Shareholders who individually or jointly
hold more than 1% of the shares of the Company shall have the right to put forward proposals to
the Company. Shareholders who individually or collectively hold more than 1% of the shares of
the Company may submit an interim proposal in writing to the convener 10 days prior to the
convening of the Shareholders’ general meeting. The convener shall issue a supplementary notice
of the Shareholders’ general meeting within the prescribed time limit, and announce the contents
of the interim proposal.
Proxy for the Shareholders’ General Meeting
A shareholder may attend and vote at the shareholders’ general meeting in person or by
proxy.
Individual shareholders attending the meeting in person shall present their personal identity
cards or other valid certificates or documents or proof of shareholding. Proxies attending the
meeting shall present their personal identity cards and the proxy statements from the shareholder.
Corporate shareholders shall be represented by its legal representative or proxies authorized
by the legal representative. Legal representatives attending the meeting shall present their personal
identity cards and valid documents that can prove its identity as the legal representative. Proxies
authorized to attend the meeting shall present their personal identity cards and the written proxy
statement legally issued by the legal representative of the legal person shareholder, except for
shareholders who are a recognized clearing house as defined in the relevant ordinances in force
from time to time under the laws of Hong Kong or the securities regulatory rules of the place
where the shares of the Company are listed (hereinafter referred to as the “ Recognized Clearing
House ”) or its proxy.
If the shareholder is a Recognized Clearing House (or their proxies), the shareholder may
authorize its company representative or one or more persons as it deems appropriate to act as its
representative at any General Meeting or any class of shareholders; however, if more than one
person is authorized, the power of attorney shall specify the number and class of shares in respect
of which each such person is so authorized. A person so authorized may act on behalf of the
Recognized Clearing House (or their proxies) as if such person were an individual shareholder of
the Company (without presenting a shareholding certificate, notarized authorization and/or further
evidence confirming its duly authorization).
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--- page 652 ---
Voting at the Shareholders’ General Meeting
The resolutions of the Shareholders’ meeting divided into ordinary resolutions and special
resolutions. An ordinary resolution at a shareholders’ general meeting shall be passed by more than
half of the voting rights held by the shareholders present at the shareholders’ general meeting. A
special resolution at a shareholders’ general meeting shall be passed by at least two-thirds of the
voting rights held by the shareholders present at the shareholders’ general meeting.
Shareholders shall exercise voting rights based on the number of shares with voting rights
held by them, and each share shall be entitled to one vote.
Where material issues affecting the interests of minority shareholders are considered at the
shareholders’ general meeting, the votes of minority shareholders shall be counted separately. The
separate votes counting results shall be disclosed publicly in a timely manner.
The shares held by the Company shall have no voting right, and shall not be included in the
total number of shares with voting rights of shareholders present at the shareholders’ general
meeting. If a shareholder purchases shares with voting rights of the Company in violation of the
provisions of Article 63(1) and (2) of the Securities Law, the voting rights of such shares in excess
of the prescribed proportion shall not be exercised and shall not be counted towards the total
number of shares with voting rights present at the shareholders’ general meeting for thirty-six
months after the purchase.
If any shareholder, under applicable laws and regulations and Hong Kong Listing Rules, is
required to abstain from voting on any particular matter being considered or is restricted to voting
only for or only against any particular matter being considered, any votes cast by or on behalf of
such shareholder in contravention of such requirement or restriction shall not be counted.
The Board of Directors, independent Directors, shareholders holding more than one per cent
of the shares with voting rights or investor protection agencies established in accordance with
laws, administrative regulations or the provisions of the CSRC as the solicit person. The Company
shall not impose minimum shareholding restrictions on the solicitation of voting rights.
The resolution of the General Meeting includes ordinary resolution and special resolution.
The following matters shall be approved by the General Meeting through ordinary resolutions:
(i) Work report of the Board of Directors;
(ii) Plans of earnings distribution and loss make-up schemes drafted by the Board of
Directors;
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--- page 653 ---
(iii) Appointment or dismissal of the members of the Board of Directors and their payment
and payment methods;
(iv) Matters concerning the change of the purpose of the raised capital;
(v) Engagement or dismissal of the accounting firm;
(vi) Other matters other than those approved by special resolution stipulated in the laws,
administrative regulations, securities regulatory rules of the place where the Company’s
Shares are listed or the Articles of Association.
The following matters shall be approved by special resolution at the General Meeting:
(i) The increase or reduction of the registered capital of the Company;
(ii) The division, spin-off, merger, dissolution and liquidation of the Company or change of
company form;
(iii) Any amendment to the Articles of Association;
(iv) Purchase or sale of significant assets within a year or provision of external guarantees
which exceeds 30% of the Company’s audited total assets for the latest period;
(v) Share option incentive plan;
(vi) Variations in the rights attached to any class of shares;
(vii) Other matters as required by the laws, administrative regulations, other securities
regulatory rules of the place where the Company’s Shares are listed and the Articles of
Association, and matters approved by ordinary resolution of the General Meeting which
are believed could materially affect our Company and need to be approved by special
resolution.
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--- page 654 ---
DIRECTORS AND BOARD OF DIRECTORS
Directors
Directors’ term of office shall be three years. Upon expiration of the term, the Director may
be re-elected. Director can be senior management personnel. However, provided that the total
number of Directors who concurrently serve as Senior Management Members and Directors who
are employee’s representatives shall not exceed half (1/2) of the total number of Directors of the
Company.
The Company has independent directors and the Board of Directors should not be less than
three or one-third independent directors. Independent directors shall faithfully perform their duties
and safeguard the interests of the Company, ensure that the legitimate rights and interests of
minority shareholders are not jeopardized.
The directors shall abide by laws, administrative regulations and the Articles of Association,
and bear fiduciary obligations towards the Company:
(i) Shall not misappropriate the properties of the Company or misappropriate company
funds;
(ii) The assets of the Company shall not be deposited in any personal account;
(iii) Shall not abuse their authority to accept bribes or other illegal income;
(iv) Shall not conclude any contract or engage in any transaction with the Company either in
violation of the Articles of Association or without the approval of the General Meeting;
(v) Shall not use the advantages provided by their own positions to pursue business
opportunities that properly belong to the Company to engage in the same business as the
Company either for their own account or for the account of any other person without the
approval of the General Meeting;
(vi) Shall not accept commissions paid by others for transactions conducted with the
Company as their own;
(vii) Shall not disclose confidential Company’s information without authorization;
(viii)Shall not abuse their connected relationships to damage the Company’s interests;
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--- page 655 ---
(ix) Other fiduciary obligations stipulated in laws, administrative regulations, departmental
rules and the Articles of Association.
The income obtained by the director in violation of the above article shall belong to the
Company; If losses are caused to the Company, it shall be liable for compensation.
Directors shall abide by laws, administrative regulations and the Articles of Association, and
have the following diligent obligations to the Company:
(i) Shall prudently, earnestly and diligently exercise the powers the Company grants to
them to ensure that the Company conducts its commercial activities in a manner that
complies with the requirements of state laws, administrative regulations and government
economic policies, and that the Company’s commercial activities do not go beyond the
scope of the business activities stipulated in the Company’s business license;
(ii) Shall treat all Shareholders fairly;
(iii) Shall maintain a timely awareness of the operation and management of the Company;
(iv) Shall sign written statements confirming the regular reports of the Company, and ensure
that the information disclosed by the Company is true, accurate and complete;
(v) Shall provide information and materials to the Audit Committee and shall not obstruct
the Audit Committee from performing its or their duties;
(vi) Other obligations of diligence stipulated in the laws, administrative regulations,
departmental rules, other securities regulatory rules of the place where the Company’s
Shares are listed, and Articles of Association.
The fiduciary duty assumed by the Directors shall not be automatically relieved upon the end
of the term of office.
Without the provisions of the Articles of Association or the lawful authorization of the Board
of Directors, no Director shall act in his own name on behalf of the Company or the Board of
Directors. When a Director acts in his/her own name, the Director shall declare his/her position
and identity in advance if the third party reasonably believes that the Director is acting on behalf
of the Company or the Board of Directors.
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--- page 656 ---
Chairman
The Board of Directors shall appoint a Chairman. The Chairman and vice chairman shall be
elected by more than one half of all Directors.
Board of Directors
The Board of Directors consists of seven Directors, one of whom is employee representative
director. No fewer than one-third of the total number of directors, while in no event fewer than
three, shall be independent directors.
The Board of Directors exercises the following powers:
(i) To convene the general Shareholders’ meeting and report on work to the General
Meeting;
(ii) Implement the resolutions of the General Meeting;
(iii) Determine the business and investment plans of our Company;
(iv) Devise the earnings distribution and loss offset plans of our Company;
(v) Formulate the plans for increasing or decreasing our Company’s registered capital, the
issuance of corporate bonds or other securities, as well as the listing of the stock of our
Company;
(vi) Formulate plans for major acquisitions of the Company, in case of the circumstances
stipulated of the Articles of Association the buy-back of shares of our Company,
corporate merger, separation, dissolution and changing the form of our Company;
(vii) Determine such matters as the Company’s external investment, purchase or sale of
assets, asset pledge, external guarantee, entrusting wealth management, connected
transaction and external donation within the scope authorized by the General
Shareholders’ Meeting;
(viii)Decide on the setup of our Company’s internal management organization;
(ix) To decide on matters such as appointment or dismissal of the Company’s general
manager, secretary to the Board of Directors and other senior officers and on their
compensation and incentives/disincentives; to decide on matters such as appointment or
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 657 ---
dismissal of the Company’s vice general manager, chief financial officer and other
senior management and on their compensation and incentives/disincentives based on the
nominations by the general manager;
(x) Set the basic management systems of our Company;
(xi) Make the modification plan to the Articles of Association;
(xii) Manage the disclosure of company information;
(xiii)Request to the general meeting of shareholders to hire or replace the accounting firm
auditing for the company;
(xiv) Attend to the work report of our Company’s general manager and review the work of
the general manager;
(xv) Other powers and duties authorized by the laws, administrative regulations, regulations
of the authorities, the Articles of Association and the shareholders’ meeting.
Meetings of the Board of Directors shall be attended by more than one-half of the Directors
before the Board of Directors meeting can be convened.
The Board of Directors shall determine the authority of external investment, acquisition and
sale of assets, asset mortgage, external guarantee matters, entrusted financial management,
connected transactions, external donations, and establish strict review and decision-making
procedures; major investment projects shall be reviewed by relevant experts and professionals and
reported to the shareholders’ meeting for approval.
If any Director has connection with the enterprise involved in the resolution made at a Board
meeting, the said Director shall not vote on the said resolution for himself/herself or on behalf of
another Director. The Board meeting may be held when more than half of the non-connected
Directors attend the meeting. The resolution of the Board meeting shall be passed by more than
half of the non-connected Directors. If the number of non-connected Directors attending the
meetings is less than three, the issue shall be submitted to the shareholders’ general meeting for
consideration.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 658 ---
Special Committees under the Board
The special committees shall be responsible to the Board of Directors, and perform their
duties according to the Articles of Association and the authorization granted by the Board of
Directors.
Senior Management Members
The Company shall have a Secretary to the Board of Directors, who shall be responsible for
the preparation of the shareholders’ general meeting and Board meeting, the custody of documents,
the management of the shareholders’ records, handling of information disclosure and investor
relations, and other relevant matters. The Secretary to the Board of Directors shall comply with the
relevant provisions of the laws, administrative regulations, departmental rules, the securities
regulatory rules of the place where the Company’s shares are listed, and the Articles of
Association.
Our Company has one general manager, appointed or dismissed by the Board of Directors.
The general manager of our Company is responsible to the Board of Directors and exercises the
following powers:
(i) To be in charge of the Company’s production, operation and management, and to
organize and implement the resolutions of the Board of Directors and report on works to
the Board of Directors;
(ii) To organize and implement the Company’s annual business plan and investment
proposals;
(iii) To draft plans for the establishment of the Company’s internal management
organizations;
(iv) To draft the Company’s basic management system;
(v) To formulate specific rules and regulations for the Company;
(vi) To propose to the Board of Directors on the appointment or dismissal of deputy general
manager, financial officer;
(vii) To appoint or dismiss management personnel other than those required to be appointed
or dismissed by the Board of Directors;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 659 ---
(viii)Other functions and powers conferred by the Articles of Association or the Board of
Directors.
QUALIFICATIONS AND RESPONSIBILITIES OF DIRECTORS AND SENIOR
MANAGEMENT
None of the following persons shall serve as our Director or senior management:
(i) A person who has no civil capacity or has limited civil capacity;
(ii) A person who has committed an offense of corruption, bribery, infringement of property,
misappropriation of property or disruption of the socialism economic order and has been
punished because of committing such offense or who has been deprived of his/her
political rights for committing an offense where a five-year period has not elapsed since
the expiration of execution period; If he/she is pronounced for suspension of sentence, a
two-year period has not elapsed since the expiration of the suspension of sentence;
(iii) A person who is a former director, factory manager or manager of an enterprise which
has entered into insolvent liquidation and is personally liable for the insolvency of such
company or enterprise, where less than three years have lapsed following the date of the
completion of the insolvency and liquidation of such company or enterprise;
(iv) A person who is a former legal representative of a company or enterprise which had its
business license revoked or had been ordered to close down due to violation of the laws
and has incurred personal liability, where less than three years have lapsed since the
date of the revocation of such business license;
(v) A person being listed as a dishonest person subject to enforcement by the people’s court
due to his/her failure to pay off a relatively large amount of due debts;
(vi) A person who is currently being prohibited from participating in the securities market by
the CSRC and such barring period has not elapsed;
(vii) A person who has been publicly determined by the stock exchange as unfit to serve as a
director or senior management of a listed company, and the disqualification period has
not expired;
(viii)Any other circumstances stipulated by laws, administrative regulations, departmental
rules or the securities regulatory rules of the place where the Company’s shares are
listed.
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--- page 660 ---
FINANCIAL AND ACCOUNTING SYSTEM
The Company shall establish its financial and accounting system in accordance with the laws,
administrative regulations and the provisions stipulated by the relevant authorities of the PRC.
The Company shall submit and disclose its annual reports to the CSRC and the stock
exchange within four months from the end of each fiscal year, and its interim reports to the
relevant branch office of the CSRC and the Shenzhen Stock Exchange within two months from the
end of the first half of each fiscal year.
The financial and accounting reports shall be prepared in accordance with relevant laws,
administrative regulations and the provisions of the securities regulatory authorities and stock
exchanges at the place where the Company’s shares are listed.
The Company will not establish account books other than the statutory account books.
The assets of the Company shall not be deposited in any personal account.
The Company is required to withdraw 10% of its profits into its statutory reserve fund when
distributing each year’s after-tax profits. When the cumulated amount of the statutory reserve fund
of the Company has reached 50% or more of its registered capital, no further withdrawal is
required.
Where the statutory reserve fund of the Company is insufficient to make up the losses of the
Company for the preceding year, profits of the current year shall be applied to make up the losses
before any allocation to the statutory reserve fund in accordance with the provisions in the
preceding paragraph. Subject to a resolution of the shareholders’ general meeting, after withdrawal
has been made to the Company’s statutory reserve fund from its after-tax profits, the Company
may set aside funds for the discretionary reserve fund.
After making up of losses and appropriation to reserve funds, balance of the profit after tax
shall be distributed to shareholders in proportion to their shareholdings, unless otherwise stipulated
in the Articles of Association.
If the General Meeting violates the Company Law and profits are distributed to the
Shareholders before the Company makes up for losses or makes allocations to the statutory reserve
fund, the profits distributed in violation of the provisions must be returned by such Shareholders to
the Company.
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--- page 661 ---
No profit shall be distributed in respect of the shares of the Company which are held by the
Company. The Company shall appoint one or more collection agents for H shareholders in Hong
Kong. The collection agents shall collect on behalf of the relevant H shareholders the dividends
distributed and other funds payable by the Company in respect of the H shares, and hold such
monies in their custody pending payment to the H shareholders concerned. The collection agents
appointed by the Company shall meet the requirements of the laws, regulations and the securities
regulatory rules of the place where the Company’s shares are listed.
Reserve funds of the Company are used for recovering losses of the Company and expanding
scale of operation of the Company or conversion into its capital. Where the reserve of a company
is used for making up losses, the discretionary reserve and statutory reserve shall be firstly used. If
losses still cannot be made up, the capital reserve can be used according to the relevant provisions.
When the statutory reserve funds are converted into capital, the remaining balance of such reserve
fund must not be less than 25% of its registered capital before such conversion.
The Company implements a continuous and stable profit distribution policy. The profit
distribution of the Company attaches importance to the reporting of investment and reasonable
investment and takes into account the sustainable development of the Company.
After the General Meeting of our Company makes a resolution on profit distribution plan, the
Board of Directors shall complete the distribution within 2 months after the convening of the
General Meeting. The specific profit distribution plan can be adjusted in accordance with such
provisions and the actual situation when it cannot be implemented within 2 months due to the
provisions of laws and regulations and securities regulatory rules of the place where the
Company’s shares are listed.
The Company has implemented an internal audit system to conduct internal audit and
supervision on the Company’s financial revenues and expenditures and economic activities. The
internal audit system of the Company and the duties of the auditors shall be implemented upon
approval by the Board. The internal audit department shall be accountable to the Board.
The Company shall appoint such accounting firm which has complied with the Securities Law
for carrying out the audit for the accounting statements, net asset verification and other relevant
consultancy services. The term of appointment is one (1) year and can be re-appointed.
The appointment of accounting firm by the Company shall be subject to the approval of the
shareholders’ general meetings. The Board of Directors may not appoint accounting firm before the
approval of the shareholders’ general meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
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--- page 662 ---
The Company guarantees that it shall provide the appointed accounting firm with true and
complete accounting vouchers, accounting books, financial and accounting reports and other
accounting information, and that it engages without any refusal, withholding, and
misrepresentation.
The audit fees of an accounting firm shall be determined at the shareholders’ general meeting.
If the Company removes or no longer re-appoints the accounting firm, it shall notify such
accounting firm twenty days in advance. When shareholders vote for the removal of such
accounting firm, such accounting firm shall be entitled to state its opinions at the shareholders’
general meeting.
DISSOLUTION AND LIQUIDATION OF THE COMPANY
The Company shall be dissolved for the following reasons:
(i) Expiry of the term of business stipulated in the Articles of Association or occurrence of
any other trigger for dissolution stipulated in the Articles of Association;
(ii) The General Meeting adopts a resolution to dissolve our Company;
(iii) Our Company needs to be dissolved for the purpose of merger or division;
(iv) The business license is revoked, or our Company is ordered to close or be eliminated
according to applicable law;
(v) Where our Company encounters significant difficulties in business and management,
continuous survival may be significantly detrimental to the interests of the shareholders,
and the difficulties may not be overcome through other means, shareholders who hold
more than 10% of all voting rights of the Company’s shareholders may request the
People’s Court to dissolve the Company.
Where our Company is dissolved due to the provisions set forth in i, ii, iv, v above, the
liquidation team shall be established within 15 days from the date of the event leading to
liquidation to commence dissolution. The personnel of the liquidation team shall consist of the
persons determined by the Directors or the General Meeting.
Within 10 days of the establishment of the liquidation team, the creditors shall be notified
and an announcement shall be published in the media designated by the securities regulatory
authorities and the stock exchange at the place where the shares are listed, or in the National
Enterprise Credit Information Publicity System within 60 days. The creditors shall declare their
claims to the liquidation team within 30 days of the date on which the notice is received or 45
days of the date of announcement if the notice is not received.
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–V - 2 2–


--- page 663 ---
Creditors who declare claims shall state relevant issues related to the claims and provide
proofs. The liquidation team shall carry out registration of the claims. During the period for
declaration of claims, the liquidation group shall not make any repayment to the creditors.
During the liquidation, our Company shall continue to exist, but shall not carry out business
activities irrelevant to the liquidation. The property of our Company shall not be distributed to any
shareholder before full payments have been made out of the property according to the aforesaid
provision.
In the event the liquidation team finds that, after taking stock of our Company’s property and
preparing the balance sheet and list of property, that the assets are insufficient to pay the debts, it
shall apply to the people’s court to declare bankruptcy to the law.
After our Company is declared bankrupt by ruling of the people’s court, according to the law
of insolvency of company implement insolvency and liquidation.
AMENDMENT TO THE ARTICLES OF ASSOCIATION
Under any of the following circumstances, the Company shall amend the Articles of
Association:
(i) Following the revision of the Company Law or relevant laws and administrative
regulations, or the securities regulatory rules of the place where the Company’s shares
are listed, the matters stipulated in the Articles of Association contradict the provisions
of the revised laws, administrative regulations and the securities regulatory rules of the
place where the Company’s shares are listed;
(ii) There is any change to the Company’s particulars which result in inconsistency with the
matters set out in the Articles of Association;
(iii) A Shareholders’ General Meeting has decided on making amendments to the Articles of
Association.
If the amendment to the Articles of Association adopted by resolution of the shareholders’
general meeting is subject to the approval of the competent authority, it shall be reported to the
competent authority for approval; if it involves matters of company registration, the registration of
the changes shall be made with the company registration authority in accordance with the law.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
–V - 2 3–


--- page 664 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation of Our Company
Our Company was established as a limited liability company under the laws of the PRC on
April 5, 2007, and was converted into a joint stock company with limited liability on May 14,
2015. We were registered with the Registrar of Companies in Hong Kong as a non-Hong Kong
company under Part 16 of the Companies Ordinance on June 27, 2025, and have established a
place of business in Hong Kong at 40/F, Dah Sing Financial Centre, No. 248 Queen’s Road East,
Wanchai, Hong Kong. Mr. AU Kai Yin has been appointed as the authorized representative of our
Company for the acceptance of service of process and notices in Hong Kong.
As our Company is incorporated in the PRC, our operations are subject to the relevant laws
and regulations of the PRC. A summary of our Articles of Association and relevant aspects of PRC
law is set out in “Taxation and Foreign Exchange,” “Summary of Principal Legal and Regulatory
Provisions” and “Summary of the Articles of Association” in Appendices III, IV and V to this
prospectus.
2. Changes in the Share Capital of Our Company
The following sets out the changes in our Company’s share capital within the two years
immediately preceding the issue of this prospectus:
(i) in February 2025, for the exercise of stock options under the 2024 Equity Incentive
Plans, our Company’s total share capital increased from RMB261,123,444 to
RMB261,801,844;
(ii) in August 2025, for the vesting of restricted Shares under the 2024 Equity Incentive
Plans, our Company’s total share capital increased from RMB261,801,844 to
RMB262,064,400;
(iii) in August 2025, pursuant to the repurchase and cancellation of restricted shares under
the 2024 Equity Incentive Plans due to the departure of our employees, our Company’s
total share capital reduced from RMB262,064,400 to RMB262,034,000;
(iv) in November 2025, pursuant to the exercise of stock options under the 2024 Equity
Incentive Plans and the cancellation of A Shares under our repurchase mandate for
reduction of share capital, our Company’s total share capital increased from
RMB262,034,000 to RMB262,630,100;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 665 ---
(v) as considered and approved at the fourth meeting of the fourth session of the Board on
November 1, 2024 and Shareholders’ meeting on November 14, 2024, our Company
repurchased 844,400 A Shares for the purpose of reducing the Company’s share capital.
Upon completion of the repurchase and cancellation, our Company’s total share capital
reduced from RMB262,630,100 to RMB261,785,700;
(vi) in December 2025, for the cancellation of restricted Shares under the 2024 Equity
Incentive Plans due to the departure of our employees, our Company’s total share capital
reduced from RMB261,785,700 to RMB261,755,700; and
(vii) in February 2026, pursuant to the exercise of stock options under the 2024 Equity
Incentive Plans, our Company’s total share capital increased from RMB261,755,700 to
RMB261,756,700.
Save as disclosed above, there has been no alteration in our share capital within the two years
immediately preceding the date of this prospectus.
3. Changes in the Share Capital of Our Subsidiaries
A summary of the corporate information and the particulars of our subsidiaries are set out in
Note 1 to the Accountants’ Report in Appendix I to this prospectus.
The following subsidiaries of our Company were incorporated within two years immediately
preceding the date of this prospectus:
Name of subsidiary
Place of
incorporation Date of incorporation Registered capital
ZhongGe Nantong ............... PRC June 18, 2024 RMB10,000,000
Shanghai Meixiao ............... PRC August 15, 2023 RMB200,000,000
MeiG Smart Technology France .... France May 12, 2025 EUR400,000
Save as disclosed above, there has been no alteration in the share capital of our subsidiaries
within the two years immediately preceding the date of this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 666 ---
4. Resolutions of Our Shareholders
On June 5, 2025, resolutions of our Shareholders were passed pursuant to which, among other
things:
(a) the Articles was approved and adopted with effect from the Listing Date;
(b) the Global Offering (including the Hong Kong Public Offering and International
Offering, if any) and the Listing were approved and our Directors were authorized to
allot and issue the Offer Shares pursuant to the Global Offering; and
(c) the number of H Shares to be issued shall be up to 30% of the total share capital of our
Company upon completion of the Global Offering.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
The following contracts (not being contracts entered into in the ordinary course of the
business carried on or intended to be carried on by our Company) were entered into by any
member of our Group within the two years preceding the date of this prospectus and are or may be
material:
(a) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Baoyue Lake Shenzhen Industrial Investment Win-Win Enterprise
Management Limited (ʮ̡ ), Nantong Baoyue Lake
Shenchantou Win-Win Enterprise Management Partnership (Limited Partnership) (ஷ
ᘒ˜ಳଉପҳ΍ᙊΆุ၍ଣΥྫΆุ (Υྫ)), and China International Capital
Corporation Hong Kong Securities Limited with respect to a subscription of Shares at
the Offer Price in the aggregate amount of HKD223,000,000;
(b) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Harvest International Premium Value (Secondary Market) Fund SPC acting on
behalf of and for the account of Harvest Oriental SP and China International Capital
Corporation Hong Kong Securities Limited with respect to a subscription of Shares at
the Offer Price in the aggregate amount of HKD50,000,000;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 667 ---
(c) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, JinYi Capital Multi-Strategy Fund SPC Ltd. acting for and on behalf of
Structured Credit SP Fund and China International Capital Corporation Hong Kong
Securities Limited with respect to a subscription of Shares at the Offer Price in the
aggregate amount of the Hong Kong dollar equivalent of USD1,500,000;
(d) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Streamax Electronics Limited (ʮ̡ ) and China International
Capital Corporation Hong Kong Securities Limited with respect to a subscription of
Shares at the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
USD4,000,000;
(e) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Open Wealth Management Limited (ʮ̡ ) and China
International Capital Corporation Hong Kong Securities Limited with respect to a
subscription of Shares at the Offer Price in the aggregate amount of HKD30,000,000;
(f) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, China Winning Limited and China International Capital Corporation Hong
Kong Securities Limited with respect to a subscription of Shares at the Offer Price in
the aggregate amount of the Hong Kong dollar equivalent of USD3,000,000;
(g) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Chau Tsang Cheong (׹and China International Capital Corporation
Hong Kong Securities Limited with respect to a subscription of Shares at the Offer Price
in the aggregate amount of HKD50,000,000;
(h) the cornerstone investment agreement dated February 25, 2026 entered into among our
Company, Meiko Elec. Hong Kong Co., Limited and China International Capital
Corporation Hong Kong Securities Limited with respect to a subscription of Shares at
the Offer Price in the aggregate amount of the Hong Kong dollar equivalent of
USD5,000,000; and
(i) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 668 ---
2. Our Intellectual Property Rights
(a) Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
consider to be material in relation to our business:
No. Trademark Class Registrant
Place of
registration
Registration
number Expiry date
1.
 9 The Company PRC 64166353 October 13,
2032
2.
 9 The Company PRC 29140613 February 20,
2029
3.
 9 The Company PRC 20367295 August 6,
2027
4.
 9 The Company PRC 20367513 October 20,
2027
5.
 9 The Company PRC 20367136 October 20,
2027
6.
 9 The Company Hong
Kong
306895504 May 11, 2035
7.
 9 The Company Hong
Kong
306895504 May 11, 2035
8.
 . 9 The Company Hong
Kong
306895513 May 11, 2035
9.
 9 The Company Hong
Kong
306895513 May 11, 2035
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 669 ---
(b) Patents
As of the Latest Practicable Date, we had registered the following patents which we consider
to be material to our business:
No. Patent Patent type Patentee Patent number Expiry date
1. A Rapid Calibration Device and
System (๟ༀ
ໄʿӻ୕) ............
Invention The Company CN201410629703.0 November 10, 2034
2. An Electric Vehicle Tracker and
Tracking Positioning Method
Based on NB-IoT Technology
(׵NB-IOTཥ
ج) .
Invention Xi’an ZhaoGe CN201811168953.3 October 7, 2038
3. A Method for Reading,
Printing, and Verifying IMEI
on Wireless Terminal Access
Devices ( ɓ၇ίೌᇞ୞၌ટ
ɝண௪ᛘ՟ IMEIࣧ
ج)............
Invention Xi’an ZhaoGe CN202210350690.8 April 1, 2042
4. A Vision-Based Positioning
Device Using AI (׵
Зༀໄ ) ..
Invention MeiGe Zhilian CN202011031790.1 September 26,
2040
5. A Method for Writing Serial
Numbers in Smart Terminal
Production and Its Testing
System ( ɓ၇౽ঐ୞၌͛ପᄳ
ʿ಻༊ӻ୕ ) ......
Invention ZhongGe
Shanghai
CN202210704164.7 June 20, 2042
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 670 ---
(c) Copyrights
As of the Latest Practicable Date, we had registered the following copyrights which we
consider to be material to our business:
No. Copyright Registrant
Registration
number Expiry date
1. OpenCpu Software V1.0 (OpenCpu ழ΁ V1.0) ... Xi’an ZhaoGe 2020SR0240227 December 31, 2069
2. Wireless Data Communication Terminal Software
V1.0 (୞၌ழ΁ V1.0) ........
Xi’an ZhaoGe 2021SR1611090 December 31, 2071
3. MA800 Data Module Software V1.0 (MA800 ᅰኽ
ᅼଡ଼ழ΁V1.0) .....................
Xi’an ZhaoGe 2022SR1614583 December 31, 2072
4. ZhongGe Dual-Channel Video Encoding Software
V2.0 (ᕐஷ༸ൖ᎖ᇜᇁழ΁ V2.0) .......
ZhongGe Shanghai 2021SR0937898 N/A (1)
5. ZhongGe CamX Architecture Multi-Camera
Information Collection Software V1.0 (ࣸ
CamX࿴ε༩ᙲ྅᎘༟ৃમණழ΁ V1.0) ....
ZhongGe Shanghai 2021SR1906242 N/A (1)
6. ZhongGe Super Frame Split-Screen Multi-Display
System V1.0 (ᜑ
ͪӻ୕V1.0) ......................
ZhongGe Shanghai 2022SR1532547 N/A (1)
7. ZhongGe General Data Transmission Module
Fault Diagnosis Program (ٙ
೻ό ) .....................
ZhongGe Shanghai 2024SR0349217 N/A (1)
8. ZhongGe Multi-Channel Camera Real-Time Data
Collection System (ε༩Cameraᐏ
՟ӻ୕) .........................
ZhongGe Shanghai 2024SR0352446 N/A (1)
9. ZhongGe CarPlay Audio and Video Casting
System (ࣸCarplayӻ୕ ) ......
ZhongGe Shanghai 2024SR0352275 N/A (1)
Note:
(1) Pursuant to the Regulation on Computer Software Protection (ᚐૢԷ) (effective on October 1,
1991 and amended on December 20, 2001, January 8, 2011 and January 30, 2013), the protection period of the
software copyright of a legal person or other entities shall be 50 years, ending on December 31, of the fiftieth year
after the first publication of the software.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 671 ---
(d) Layout Design of Integrated Circuit
As of the Latest Practicable Date, we had maintained the following layout design of
integrated circuits which we consider to be material in relation to our business:
No. Name Registrant
Registration
number Expiry date
1. Multi-mode LTE Smart Communication
Module Signal Transceiver Chip ( εᅼ
LTE໮ϗ೯ఊʩ౺˪ ) .
ZhongGe
Shanghai
BS.205555314 July 29, 2030
2. Circuit Design Layout of LTE
Multi-mode Terminal Image
Recognition Device (LTE εᅼ୞၌ዚ
̺ྡ )........
ZhongGe
Shanghai
BS.205555306 July 29, 2030
(e) Domain Names
As of the Latest Practicable Date, we had registered the following domain names which we
consider to be material in relation to our business:
No. Domain name Registrant Expiry date
1. meigsmart.com ........................... the Company November 4,
2034
2. meiglink.com ............................. the Company April 19, 2027
Save as aforesaid, as of the Latest Practicable Date, there were no other trademarks, patents
or other intellectual or industrial property rights which we consider to be material in relation to
our business.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 672 ---
C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
1. Disclosure of Interests
(a) Interests of our Directors and chief executive
Immediately following the completion of the Global Offering (assuming that (i) no new
Shares are issued under our 2024 Equity Incentive Plans, (ii) the Offer Size Adjustment Option is
not exercised and (iii) no other changes are made to the issued share capital of our Company
between the Latest Practicable Date and the Listing Date), the interests or short positions of our
Directors and chief executive in the shares, underlying shares and debentures of our Company or
our associated corporations (within the meaning of Part XV of the SFO) which will have to be
notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the
SFO (including interests or short positions which they are taken or deemed to have under such
provisions of the SFO) or which will be required, pursuant to section 352 of the SFO, to be
entered in the register referred to therein, or which will be required, pursuant to the Model Code
for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing
Rules, to be notified to our Company and the Stock Exchange, once the H Shares are listed, are set
out below:
(i) Interest in our Company
Name of Shareholder Nature of interest (1)
Number and class of
Shares or underlying
Shares held
Shareholding in
relevant class of
Shares or underlying
Shares held as of the
Latest Practicable
Date
Approximate
shareholding in
relevant class of
Shares after the
Global Offering (2)
Mr. WANG Ping (3) .... Beneficial owner 102,417,560
A Shares
39.13% 34.51%
Interest in controlled
corporation (3)
26,248,240
A Shares
10.03% 8.85%
Mr. DU Guobin ...... Beneficial owner 390,000
A Shares
0.15% 0.13%
Mr. XIA Youqing ..... Beneficial owner 104,000
A Shares
0.04% 0.04%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 673 ---
Name of Shareholder Nature of interest (1)
Number and class of
Shares or underlying
Shares held
Shareholding in
relevant class of
Shares or underlying
Shares held as of the
Latest Practicable
Date
Approximate
shareholding in
relevant class of
Shares after the
Global Offering (2)
Mr. HUANG Min ..... Beneficial owner 78,000
A Shares
0.03% 0.03%
Notes:
(1) All interests stated are long positions.
(2) The calculation is based on the total number of 296,756,700 Shares in issue immediately following the completion
of the Global Offering.
(3) As of the Latest Practicable Date, ZhaoGe Investment was ultimately controlled by Mr. WANG Ping as its general
partner. By virtue of the SFO, Mr. WANG Ping is deemed to be interested in the Shares held by ZhaoGe
Investment. For details, please see “History and Corporate Structure — Corporate Structure” and “Substantial
Shareholders” in this prospectus.
(ii) Interest in our associated corporations
Save as disclosed in the table below, so far as our Directors are aware, immediately following
the completion of the Global Offering, no Directors or the chief executive will, directly or
indirectly, be interested in the shares or underlying shares of the associated corporations of our
Company.
Name of Director or
the chief executive Nature of interest Associated corporations
Approximate % of
shareholding
Mr. WANG Ping ........ Interest in controlled
corporation (1)
Shenzhen Pinsu Zhilian
Information Technology Co.,
Ltd. (Ҧஔ
ʮ̡)( “ Pinsu Zhilian ”)
10.7%
Notes:
(1) As of the Latest Practicable Date, MeiG Zhilian is interested in 37.5% of the equity interest of Pinsu Zhilian, which
was held by Shenzhen Gaoxin Venture Capital Co., Ltd. (ʮ̡ )( “ Gaoxin VC ”), a
company ultimately controlled by Mr. WANG Ping, as to 10.7%. As such, Mr. Wang is deemed to be interested in
the shares held by Gaoxin VC.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 0–


--- page 674 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering, no Directors or the chief executive will, directly or indirectly, be interested in the shares
or underlying shares of the associated corporations of our Company.
(b) Interests of our substantial Shareholders
Save as disclosed in “Substantial Shareholders” in this prospectus and “— C. Further
Information About Our Directors and Substantial Shareholders — 1. Disclosure of Interests — (a)
Interests of Our Directors and chief executive — (ii) Interest in our associated corporations” in
this section, our Directors and chief executive are not aware of any person (other than a Director
or chief executive of our Company) who will have an interest or a short position in the shares or
underlying shares of our Company which would fall to be disclosed to our Company under the
provisions of Divisions 2 and 3 of Part XV of the SFO, or will be, directly or indirectly, interested
in 10% or more of the issued voting shares of any other member of our Group any other member
of our Group.
2. Directors’ Service Contracts and Letters of Appointment
Each of our executive Directors has entered into a service contract with our Company. The
principal particulars of these service contracts comprise (a) the term of the service; (b) termination
provisions; and (c) dispute resolution provision. The service contracts may be renewed in
accordance with our Articles of Association and the applicable Listing Rules.
We have issued letters of appointment to each of our independent non-executive Directors.
The principal particulars of these appointment letters comprise (a) the term of the service; (b)
termination provisions; and (c) dispute resolution provision. The letters of appointment may be
renewed in accordance with our Articles of Association and the applicable Listing Rules.
Save as disclosed above, none of our Directors have entered, or have proposed to enter, a
service contract with any member of our Group (other than contracts expiring or determinable by
the employer within one year without the payment of compensation (other than statutory
compensation)).
3. Directors’ Remuneration
The aggregate remuneration paid and benefits in kind granted to our Directors by our Group
in respect of the last completed financial year, being year ended December 31, 2024, was RMB5.0
million. For details of our Directors’ emoluments during the Track Record Period, please see note
9 to the Accountants’ Report in Appendix I to this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 1–


--- page 675 ---
Under the arrangements in force at the date of this prospectus, we estimate the aggregate
remuneration payable to, and benefits in kind receivable by, our Directors by our Group in respect
of the year ending December 31, 2025 to be approximately RMB5.2 million.
D. 2024 EQUITY INCENTIVE PLANS
2024 STOCK OPTION INCENTIVE PLAN
The following is a summary of the principal terms of our 2024 Stock Option Incentive Plan.
Given no further share options will be granted under the 2024 Stock Option Incentive Plan after
the Listing, the terms of the 2024 Stock Option Incentive Plan are not subject to the provisions of
Chapter 17 of the Listing Rules other than the disclosure requirement under Rule 17.02(1)(b).
(a) Purpose
The purpose of the 2024 Stock Option Incentive Plan is to improve corporate governance
structure of our Group, to establish and improve our Group’s incentive mechanism, to attract and
retain talents in order to achieve a sustained and healthy development of our Group, and to align
the interests of our Shareholders with the interests of our Group and employees for realizing our
Group’s long-term objectives.
(b) Administration
The 2024 Stock Option Incentive Plan is subject to the approval of the Shareholders’
meeting, the administration of our Board and the supervision of our board of supervisors and
independent Directors of our Company.
(c) Participants
The participants of our 2024 Stock Option Incentive Plan include our mid-level management
and core technical staff. The scope of participants of our 2024 Stock Option Incentive Plan
excludes incumbent supervisors, independent directors, shareholders individually or collectively
holding 5% or more of the shares of our Company, the Company’s actual controllers, and their
spouse, parents and children.
(d) Maximum number of options
The shares underlying the options to be granted under the 2024 Stock Option Incentive Plan
are A Shares to be issued by our Company to the selected participants. Each option granted
represents the right to purchase one Share within the exercise period at the exercise price. The
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 2–


--- page 676 ---
maximum number of options that can be granted under the 2024 Stock Option Incentive Plan are
2,100,000, among which 500,000 options are retained stock options (“ 2024 Retained Stock
Options ”), the grantees of which shall be determined within 12 months after the approval of the
2024 Stock Option Incentive Plan by the Shareholders’ meeting.
(e) Date of grant and duration of the incentive plan
The date on which the options are granted shall be a trading day determined by the Board
within 60 days after the date of approval of the 2024 Stock Option Incentive Plan by the
Shareholders’ meeting. The grant of options shall be approved by the Board, registered and
announced within 60 days after the approval of the 2024 Stock Option Incentive Plan by the
Shareholders’ meeting. The 2024 Stock Option Incentive Plan shall be valid for a term of five
years commencing from the date of completion of the grant of the options.
(f) Conditions to the grant of options
The options under the 2024 Stock Option Incentive Plan will only be granted to selected
participants if the following conditions are fulfilled:
(i) With respect to our Company, none of the following circumstances having occurred:
(1) an audit report with an adverse opinion or a disclaimer of opinion has been issued
by the reporting accountant with respect to our Company’s accountant’s report for
the most recent fiscal year;
(2) an audit report with an adverse opinion or a disclaimer of opinion has been issued
by the reporting accountant with respect to the internal control report contained in
accountant’s report for the most recent fiscal year;
(3) our Company has not distributed dividends in accordance with the laws and
regulations, our Articles of Association or our public commitment within the last
36 months after its listing;
(4) applicable laws and regulations prohibit the implementation of any share incentive
scheme; or
(5) any other circumstances determined by the CSRC; and
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 3–


--- page 677 ---
(ii) With respect to a grantee, none of the following circumstances having occurred:
(1) the grantee has been regarded as an inappropriate person by the Shenzhen Stock
Exchange within the last 12 months;
(2) the grantee has been regarded as an inappropriate person by the CSRC or its local
office within the last 12 months;
(3) the grantee has been punished or prohibited from entering into the securities
market by the CSRC or its local office within the last 12 months;
(4) the grantee is not qualified to serve as a director or senior management according
to the PRC Company Law;
(5) the grantee is prohibited from participating in any incentive plan of listed
companies according to applicable laws and regulations; or
(6) any other circumstances determined by the CSRC.
No consideration is paid/payable for the options granted under 2024 Stock Option Incentive
Plan.
(g) Exercise of options
Options may be exercised by a grantee provided that (i) the conditions set out under
paragraph (f) above are fulfilled at the time of exercise of options; (ii) the grantee is not found by
the Board to be in serious breach of the rules of our Company; and (iii) the annual assessment and
performance targets as set out under the 2024 Stock Option Incentive Plan are achieved.
The exercise price for the option to be granted under each Stock Option Incentive Plan shall
be the higher of (i) the average trading price of the Shares in the trading day before the
announcement of the draft plan; and (ii) the average trading price of the Shares during 20 trading
days before the announcement of the draft plan. The number of options granted and the exercise
prices will be adjusted upon the occurrence of certain events, including increase in the share
capital by way of capitalization of capital reserves, issue of bonus shares, subdivision of shares
and issue of new shares.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 4–


--- page 678 ---
The exercise schedule of the options granted are either:
(i) exercisable in tranches of 40% during the exercise period that occur between the first
trading date after the 12-month anniversary from the date of grant and the last trading
day up to the 24-month anniversary of the date of grant;
(ii) exercisable in tranches of 30% during the exercise period that occur between the first
trading date after the 24-month anniversary from the date of grant and the last trading
day up to the 36-month anniversary of the date of grant; or
(iii) exercisable in tranches of 30% during the exercise period that occur between the first
trading date after the 36-month anniversary from the date of grant and the last trading
day up to the 48-month anniversary of the date of grant.
The exercise of the options granted under the 2024 Stock Option Incentive Plan shall be on a
trading day, which shall not fall within the following periods: (i) 15 days before the publication of
annual report and interim report; (ii) five days before the publication of quarterly report, earnings
forecast, and preliminary earnings estimate; (iii) the period starting from 15 days before the initial
publication of annual report and interim report (due to any delay of publication) until one day
before the publication of such report; (iv) the period starting from the date of occurrence of any
significant price-sensitive event or the decision-making process in respect of such event until the
date of announcement of such event; and (v) any other period stipulated by the CSRC and the
Shenzhen Stock Exchange.
The grantees must exercise their options within the validity period of the respective options.
Upon the expiry of the validity period, options granted but not exercised will cease to be
exercisable and shall be canceled by our Company.
(h) Outstanding options
As of the Latest Practicable Date, the number of A Shares underlying the outstanding options
granted under the 2024 Stock Option Incentive Plan amounted to 1,496,300 A Shares, representing
approximately 0.50% of the issued Shares immediately following the completion of the Listing
(assuming that (i) no changes to our issued and outstanding shares between the Latest Practicable
Date and the Listing and (ii) the Offer Size Adjustment Option is not exercised). As of the Latest
Practicable Date, among the outstanding options, 387,800 were held by six connected persons and
1,108,500 were held by 144 employees of our Company, none of whom was a Director or senior
management of our Company, or directors (including those who served as directors in the past 12
months), supervisors or chief executive of our subsidiaries. Assuming all outstanding options
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 5–


--- page 679 ---
granted under the 2024 Stock Option Incentive Plan, the issued and outstanding shareholding of
the Shareholders immediately following completion of the Listing will be diluted by approximately
0.50%. The dilution effect on our earnings per Share would be approximately 0.50%.
The table below sets forth the details of the options granted to (i) connected persons who are
not the Directors or senior management of our Company and (ii) grantees with options for 20,000
A Shares or more under the 2024 Stock Option Incentive Plan which were outstanding as of the
Latest Practicable Date:
Name of
grantee Position in our Group Address Date of grant
Number of
shares under
options granted Exercise price Exercise period
As an
approximate
percentage of
issued share
capital upon
completion of
the Global
Offering
Connected Persons
ZHOU Zhou
(մЋ) ..
Supervisor of MeiG
Investment and the
Company’s vice
finance manager
Room 1702, Building 7,
Phase 1, Zhongzhou
Huafu, Xin’an
Subdistrict, Bao’an
District, Shenzhen,
China
July 1, 2024 25,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.01%
LI Xiaobing
(ҽʃж) .
General manager and
vice president of Xi’an
ZhaoGe
Unit 1, 13th Floor,
Building 1, No. 39
Keji Road, Yanta
District, Xi’an,
Shaanxi Province,
China
July 1, 2024 18,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.01%
June 10,
2025
100,000 45.67 50%: From June 10, 2026 to
June 9, 2027;
50%: From June 10, 2027 to
June 9, 2028
0.03%
ZHANG
Qiuyue
(˜) .
Supervisor and vice
president of Xi’an
ZhaoGe
No. 68 Keji 2nd Road,
Yanta District, Xi’an,
Shaanxi Province,
China
July 1, 2024 12,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.00%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 6–


--- page 680 ---
Name of
grantee Position in our Group Address Date of grant
Number of
shares under
options granted Exercise price Exercise period
As an
approximate
percentage of
issued share
capital upon
completion of
the Global
Offering
YU Ying
(ߵں)..
Supervisor of ZhongGe
Nantong and manager
of human resource of
ZhongGe Shanghai
No. 50 Luoqiao
Subdistrict Office,
Shangrao County,
Shangrao, Jiangxi
Province, China
July 1, 2024 7,800 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.00%
ZHANG
Shulin
(؍).
Executive director of
ZhongGe Nantong and
head of R&D
department of
ZhongGe Shanghai
No. 63 Beijing East
Road, Nanjing, Jiangsu
Province, China
July 1, 2024 9,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.00%
June 10,
2025
150,000 45.67 50%: From June 10, 2026 to
June 9, 2027;
50%: From June 10, 2027 to
June 9, 2028
0.05%
LI Peng
(ҽᘄ) ..
Supervisor of Shanghai
Meixiao, supervisor
and senior vice
president of ZhongGe
Shanghai
Room 102, No. 39, Lane
168 Qinchun Road,
Minhang District,
Shanghai, China
July 1, 2024 66,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.02%
Grantees with options for 20,000 A Shares or more
GUO
Jinhuan
(๰) .
Deputy finance manager
of the Company
Group 6, Rengang
Village, Xinshi Town,
Zaoyang City, Hubei
Province, China
July 1, 2024 20,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.01%
GUO
Qianghua
(ெ੶ശ) .
Vice president of product
planning department of
ZhongGe Shanghai
Room 502, No. 32, Lane
2999, Qixin Road,
Minhang District,
Shanghai, China
July 1, 2024 45,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.01%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 7–


--- page 681 ---
Name of
grantee Position in our Group Address Date of grant
Number of
shares under
options granted Exercise price Exercise period
As an
approximate
percentage of
issued share
capital upon
completion of
the Global
Offering
FAN Dian
(Պ) ..
Senior vice president of
sales department of
ZhongGe Shanghai
Room 401, No. 18, Lane
1199d Xingmei
Road d Minhang
District, Shanghai,
China
July 1, 2024 130,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.04%
June 10,
2025
100,000 45.67 50%: From June 10, 2026 to
June 9, 2027;
50%: From June 10, 2027 to
June 9, 2028
0.03%
HUANG
Dequan
(රᅃᛆ) .
Operations management
center head of
ZhongGe Shanghai
Room 1203, No. 1, Lane
59, Pingyang Road,
Minhang District,
Shanghai, China
July 1, 2024 6,000 20.97 40%: From July 1, 2025 to
June 30, 2026;
30%: From July 1, 2026 to
June 30, 2027;
30%: From July 1, 2027 to
June 30, 2028
0.00%
June 10,
2025
150,000 45.67 50%: From June 10, 2026 to
June 9, 2027;
50%: From June 10, 2027 to
June 9, 2028
0.05%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 8–


--- page 682 ---
The table below sets forth the details of options granted to other grantees under the 2024
Stock Option Incentive Plan, categorized by the number of underlying A Shares, which were
outstanding as of the Latest Practicable Date:
Category by
number of
underlying
A Shares
Number of
grantees Date of grant
Number of
shares under
options
granted
Exercise
price Exercise period
As an
approximate
percentage of
issued share
capital upon
completion
of the Global
Offering
1−5,000 ..... 93 July 1, 2024 294,200 RMB20.97 40%: From July 1, 2025 to June 30, 2026;
30%: From July 1, 2026 to June 30, 2027;
30%: From July 1, 2027 to June 30, 2028
0.10%
5,001−10,000 .. 38 July 1, 2024 245,700 RMB20.97 40%: From July 1, 2025 to June 30, 2026;
30%: From July 1, 2026 to June 30, 2027;
30%: From July 1, 2027 to June 30, 2028
0.08%
10,001−15,000 . 8 July 1, 2024 98,400 RMB20.97 40%: From July 1, 2025 to June 30, 2026;
30%: From July 1, 2026 to June 30, 2027;
30%: From July 1, 2027 to June 30, 2028
0.03%
15,001−19,999 . 1 July 1, 2024 19,200 RMB20.97 40%: From July 1, 2025 to June 30, 2026;
30%: From July 1, 2026 to June 30, 2027;
30%: From July 1, 2027 to June 30, 2028
0.01%
Notes:
(1) The calculation is based on the assumption that no additional Shares are issued pursuant to our 2024 Equity
Incentive Plans.
(2) Included two grantees who were granted stock options on June 10, 2025.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 1 9–


--- page 683 ---
2024 RESTRICTED SHARE INCENTIVE PLAN
The following is a summary of the principal terms of our 2024 Restricted Share Incentive
Plan. The terms of the 2024 Restricted Share Incentive Plan are not subject to the provisions of
Chapter 17 of the Listing Rules other than Rule 17.12 as it does not involve any grant of restricted
Shares by our Company after our Listing but is partially funded by our treasury Shares which are
not listed on the Stock Exchange. Our Company will comply with applicable requirements under
Rule 19A.39E of the Listing Rules as and when appropriate and required.
(a) Purpose
The purpose of the 2024 Restricted Share Incentive Plan is to improve corporate governance
structure of our Group, to establish and improve our Group’s incentive mechanism, to attract and
retain talents in order to achieve a sustained and healthy development of our Group, and to align
the interests of our Shareholders with the interests of our Group and employees for realizing our
Group’s long-term objectives.
(b) Administration
The 2024 Restricted Share Incentive Plan is subject to the approval of the Shareholders’
meeting, the administration of our Board and the supervision of our board of supervisors and
independent Directors of our Company.
(c) Participants
The participants of our 2024 Restricted Share Incentive Plan include our mid-level
management and core technical staff. The scope of participants of our 2024 Restricted Share
Incentive Plan excludes incumbent supervisors, independent directors, shareholders individually or
collectively holding 5% or more of the shares of our Company, the Company’s actual controllers,
and their spouse, parents and children.
(d) Source and Maximum Number of Shares
The underlying A Shares are the A Shares to be issued by our Company and/or repurchased
by our Company from the secondary market.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 0–


--- page 684 ---
Each restricted Share granted represents the right to purchase one A Share within the agreed
period at the grant price. The restricted Shares are subject to a lock-up period and will only be
unlocked upon fulfilling the unlocking conditions stipulated. The maximum number of restricted
Shares that can be granted under the 2024 Restricted Share Incentive Plan is 4,010,000, among
which 500,000 are retained restrict Shares (“ 2024 Retained Restricted Shares ), the grantees of
which shall be determined within 12 months after the approval of the 2024 Restricted Share
Incentive Plan by the Shareholders’ meeting.
(e) Date of Grant and Term of the 2024 Restricted Share Incentive Plan
The date on which the restricted Shares are granted shall be determined by the Board after
the approval of the 2024 Restricted Share Incentive Plan by the Shareholders’ meeting. Under our
2024 Restricted Share Incentive Plan, the initial grant of restricted Shares shall be announced
within 60 days after the approval of such plan by the Shareholders’ meeting. The 2024 Restricted
Share Incentive Plan shall be effective from the date of the initial grant of restricted Shares under
the plans up to the date when all of the restricted Shares granted under the plans have been
unlocked or void and lapsed, provided that the term of the plans shall not exceed 60 months.
(f) Lock-up for Directors and Senior Management
If the grantee is a Director or a member of senior management of our Company,
(i) during their employment with our Company, the Shares to be transferred in each year
shall not exceed 25% of the total Shares he or she holds;
(ii) no Share held by such Director or senior management can be transferred within six
months after termination of his or her employment with our Company;
(iii) income gained through sale of Shares within six months of the purchase or purchase of
Shares within six months of the sale shall belong to our Company and will be forfeited
by the Board; and
(iv) if there is any change in the applicable laws and regulations on the foregoing lock-up
requirements, the grantee shall comply with the amended laws and regulations.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 1–


--- page 685 ---
(g) Conditions to the Grant of Restricted Shares
The restricted Shares under the 2024 Restricted Share Incentive Plan will only be granted to
selected participants if the following conditions are fulfilled:
(i) with respect to our Company, none of the following circumstances having occurred:
(1) an audit report with an adverse opinion or a disclaimer of opinion has been issued
by the reporting accountant with respect to our Company’s accountant’s report for
the most recent fiscal year;
(2) an audit report with an adverse opinion or a disclaimer of opinion has been issued
by the reporting accountant with respect to the internal control of the financial
report for the most recent fiscal year;
(3) our Company has not distributed dividends in accordance with the laws and
regulations, our Articles of Association or our public commitment within the last
36 months after its listing;
(4) applicable laws and regulations prohibit the implementation of share incentive; or
(5) other circumstances determined by the CSRC; and
(ii) with respect to a grantee, none of the following circumstances having occurred:
(1) the grantee has been regarded as an inappropriate person by the Shenzhen Stock
Exchange within the last 12 months;
(2) the grantee has been regarded as an inappropriate person by the CSRC and its local
office within the last 12 months;
(3) the grantee has received administrative penalty or been prohibited from entering
into the securities market by the CSRC and its local office due to material
non-compliance with applicable laws and regulations within the last 12 months;
(4) the grantee is not qualified to serve as a director or senior management according
to the PRC Company Law;
(5) the grantee is prohibited from participating in any share incentive of listed
companies according to applicable laws and regulations; or
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 2–


--- page 686 ---
(6) other circumstances determined by the CSRC.
(h) Unlocking and Vesting of Restricted Shares
The restricted Shares are vested upon the grant date but will only be unlocked when (i) the
conditions set out under paragraph (g) above are fulfilled; (ii) the grantee is not found by the
Board to be in serious breach of the rules of our Company; and (iii) the annual assessment and
performance targets as set out under the respective Restricted Share Incentive Plan are achieved.
Under the 2024 Restricted Share Incentive Plan, the restricted Shares (other than the 2024
Retained Restricted Shares) will be unlocked in tranches of 40%, 30% and 30% in each of the
three unlocking periods that occur between the first trading date after 12 months from the date of
grant and the last trading day up to 48 months from the date of grant, respectively.
If the 2024 Retained Restricted Shares are granted before the release of our Company’s 2024
third quarterly report, the unlocking schedule is the same as that of the other restricted Shares
initially granted as described above. Otherwise, the 2024 Retained Restricted Shares shall be
unlocked in tranches of 50% in each of the two unlocking periods that occur between the first
trading date after 12 months from the date of grant and the last trading day up to 36 months from
the date of grant.
The number of restricted Shares granted and/or unlocked and/or the grant prices shall be
adjusted upon the occurrence of certain events, including increase in the share capital by way of
capitalization of capital reserves, distribution of dividends, subdivision of shares, placing and
share reduction. Such adjusted restricted Shares are subject to the same unlocking conditions. Our
Company may void the granted restricted Shares upon occurrence of certain events as set out in
the 2024 Restricted Share Incentive Plan, including but not limited to the termination of
employment of the grantees with our Company.
(i) Outstanding restricted Shares
As of the Latest Practicable Date, the number of outstanding restricted Shares granted under
the 2024 Restricted Share Incentive Plan as resolved by our Board was 2,565,200, representing
approximately 0.86% of the total issued Shares immediately following completion of the Global
Offering (assuming (i) no additional Shares are issued pursuant to our 2024 Restricted Share
Incentive Plan and (ii) the Offer Size Adjustment Option is not exercised). As of the Latest
Practicable Date, a total of 2,565,200 outstanding restricted Shares were granted to 261 grantees,
none of whom was a Director or senior management of our Company.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 3–


--- page 687 ---
The following table sets forth the number of outstanding restricted Shares granted to
connected persons of our Company under the 2024 Restricted Share Incentive Plan of the Latest
Practicable Date:
Name of grantee Position in our Group
Date of outstanding
restricted Shares
Number of
outstanding
restricted
Shares Grant price Lock-up period
As an
approximate
percentage of
issued share
capital upon
completion of
the Global
Offering
ZHANG Shulin
(؍).......
Executive director of
ZhongGe Nantong
and head of R&D
department of
ZhongGe Shanghai
July 1, 2024 48,000 10.55 From July 1, 2024 to
June 30, 2025
0.02%
June 10, 2025 25,000 22.84 12 month from the
registration date of
restricted Shares
0.01%
LI Xiaobing
(ҽʃж).......
General manager and
vice president of
Xi’an ZhaoGe
July 1, 2024 30,000 10.55 From July 1, 2024 to
June 30, 2025
0.01%
June 10, 2025 20,000 22.84 12 month from the
registration date of
restricted Shares
0.01%
ZHOU Zhou ( մЋ) .. Supervisor of MeiG
Investment and the
Company’s vice
finance manager
July 1, 2024 36,000 10.55 From July 1, 2024 to
June 30, 2025
0.01%
June 10, 2025 7,500 22.84 12 month from the
registration date of
restricted Shares
0.00%
ZHANG Qiuyue
(˜).......
Supervisor and vice
president of Xi’an
ZhaoGe
July 1, 2024 25,200 10.55 From July 1, 2024 to
June 30, 2025
0.01%
YU Ying (ߵں).... Supervisor of
ZhongGe Nantong
and manager of
human resource of
ZhongGe Shanghai
July 1, 2024 7,200 10.55 From July 1, 2024 to
June 30, 2025
0.00%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 4–


--- page 688 ---
Name of grantee Position in our Group
Date of outstanding
restricted Shares
Number of
outstanding
restricted
Shares Grant price Lock-up period
As an
approximate
percentage of
issued share
capital upon
completion of
the Global
Offering
LI Peng ( ҽᘄ) .... Supervisor of
Shanghai Meixiao,
supervisor and
senior vice president
of ZhongGe
Shanghai
July 1, 2024 120,000 10.55 From July 1, 2024 to
June 30, 2025
0.04%
The table below sets forth the details of outstanding restricted Shares granted to other
grantees (excluding the abovementioned connected persons of our Company) under the 2024
Restricted Share Incentive Plan as of the Latest Practicable Date:
Number of grantees Date of grant Lock-up period Grant price
Number of
outstanding
restricted Shares
As an
approximate
percentage of
issued share
capital upon
completion of the
Global Offering
191 (2) July 1, 2024 From July 1, 2024 to June 30, 2025 RMB10.55 1,798,800 0.61%
92(3) June 10, 2025 June 10, 2025 to June 9, 2026 RMB22.84 447,500 0.15%
Note:
(1) The calculation is based on the assumption that no additional Shares are issued pursuant to our 2024 Equity
Incentive Plans.
(2) Included 91 grantees who were granted restricted Shares on June 10, 2025.
(3) Subject to a lock-up period of 12 month from the registration date of restricted Shares.
E. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no material liability for estate duty would be likely to
fall upon any member of our Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 5–


--- page 689 ---
2. Litigation
Save as disclosed in this prospectus and so far as our Directors are aware, no litigation or
claim of material importance is pending or threatened against any member of our Group.
3. Sole Sponsor
The Sole Sponsor has made an application on our behalf to the Listing Committee for the
listing of, and permission to deal in, the H Shares in issue and to be issued pursuant to the Global
Offering.
The Sole Sponsor satisfies the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules. The Sole Sponsor will receive a fee of US$480,000 (tax inclusive) for
acting as a sponsor for the Listing.
4. No Material Adverse Change
Save as disclosed in this prospectus, our Directors confirm that there has been no material
adverse change in the financial or trading position of our Group since September 30, 2025 (being
the date to which the latest audited consolidated financial statements of our Group were prepared).
5. Qualification and Consent of Experts
This prospectus contains statements made by the following experts:
Name Qualification
China International Capital
Corporation Hong Kong
Securities Limited
A corporation licensed to carry on Type 1 (dealing in
securities), Type 2 (dealing in futures contracts), Type 4
(advising on securities), Type 5 (advising on futures
contracts) and Type 6 (advising on corporate finance)
regulated activities under the SFO
Han Kun Law Offices Qualified PRC lawyers
Ernst & Young Certified Public Accountants and Registered Public Interest
Entity Auditor
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
Industry consultant
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 6–


--- page 690 ---
As of the Latest Practicable Date, none of the experts named above had any shareholding in
any member of our Group or the right (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for securities in any member of our Group.
The experts named above have each given and have not withdrawn their respective written
consents to the issue of this prospectus with copies of their reports, letters, opinions or summaries
of opinions (as the case maybe) and references to their names included in the form and context in
which they are respectively included.
6. Promoter
Information of our promoters at the time of our Company’s conversion into a joint stock
limited company on May 14, 2015 is as follows:
Shareholder
Number of Shares
held upon our
conversion
Percentage
shareholding
WANG Ping ...................................... 46,336,000 57.92%
Zhaoge Investment ................................. 14,480,000 18.10%
WANG Cheng ..................................... 11,584,000 14.48%
Fenghuang Investment ............................... 7,600,000 9.50%
Total ............................................ 800,000,000 100.00%
Save as disclosed in this prospectus, within the two years immediately preceding the date of
this prospectus, no cash, securities or other benefit has been paid, allotted or given nor are any
proposed to be paid, allotted or given to the above promoters in connection with the Global
Offering and the related transactions described in this prospectus.
7. Preliminary Expenses
We have not incurred any material preliminary expenses.
8. Binding Effect
This prospectus shall have the effect, where an application is made in pursuance hereof, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions) of
sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance
insofar as applicable.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 7–


--- page 691 ---
9. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being published
separately in reliance upon the exemption provided by section 4 of the Companies (Exemption of
Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws
of Hong Kong).
10. Miscellaneous
(a) Save as disclosed in this prospectus, within the two years immediately preceding the
date of this prospectus:
(i) no commissions, discounts, brokerages or other special terms have been granted in
connection with the issue or sale of any capital of any member of our Group, and
no Directors, promoters or experts named in “E. Other Information — 5.
Qualification and Consent of Experts” in this section have received any such
payment or benefit;
(ii) no capital of any member of our Group has been issued or is proposed to be issued
for cash or issued as fully or partly paid up otherwise than in cash;
(iii) none of our Directors or the experts named in “E. Other Information — 5.
Qualification and Consent of Experts” in this section have any interest, direct or
indirect, in the promotion of, or in any assets which have been, acquired or
disposed of by or leased to, any member of our Group, or are proposed to be
acquired or disposed of by or leased to any member of our Group; and
(iv) no commissions (but not including commissions to sub-underwriters) have been
paid or payable for subscribing or agreeing to subscribe, or procuring or agreeing
to procure subscriptions, for any Shares or debentures of our Company.
(b) Save as disclosed in this prospectus:
(i) there is no arrangement under which future dividends are waived or agreed to be
waived;
(ii) our Company has no outstanding convertible debt securities or debentures;
(iii) there are no founder, management or deferred shares in our Company or any of our
subsidiaries;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 8–


--- page 692 ---
(iv) no capital of any member of our Group is under option, or is agreed conditionally
or unconditionally to be put under option;
(v) there has not been any interruption in the business of our Group which may have
or have had a significant effect on our financial position in the 12 months
immediately preceding the date of this prospectus; and
(vi) none of our Directors are materially interested in any contract or arrangement
subsisting at the date of this prospectus which is significant in relation to the
business of our Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
–V I - 2 9–


--- page 693 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) a copy of each of the material contracts referred to in “Statutory and General
Information — B. Further Information About Our Business — 1. Summary of Material
Contracts” in Appendix VI to this prospectus; and
(b) the written consents referred to in “Statutory and General Information — E. Other
Information — 5. Qualification and Consent of Experts” in Appendix VI to this
prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the websites of the Stock Exchange
at www.hkexnews.hk
and our Company at www.meigsmart.com f o rap e r i o do f1 4d a y sf r o mt h e
date of this prospectus:
(a) the Articles of Association;
(b) the audited consolidated financial statements of our Group for the Track Record Period;
(c) the Accountants’ Report for the Track Record Period issued by Ernst & Young, the text
of which is set out in Appendix I to this prospectus;
(d) the report on the unaudited pro forma financial information of our Group issued by
Ernst & Young, the text of which is set out in Appendix IIA to this prospectus;
(e) the letters from Ernst & Young and the Sole Sponsor relating to the profit estimate of
our Group for the year ended December 31, 2025, the text of which is set out in
Appendix IIB to this Prospectus;
(f) the legal opinions issued by Han Kun Law Offices, our PRC Legal Advisor, in respect
of certain aspects and the property interests of the Group in the PRC;
(g) the industry report issued by Frost & Sullivan;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– VII-1 –


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(h) the material contracts referred to in “Statutory and General Information — B. Further
Information About Our Business — 1. Summary of Material Contracts” in Appendix VI
to this prospectus;
(i) the service contracts and letters of appointment referred to in “Statutory and General
Information — C. Further Information About Our Directors and Substantial
Shareholders — 2. Directors’ Service Contracts and Letters of Appointment” in
Appendix VI to this prospectus;
(j) the written consents referred to in “Statutory and General Information — E. Other
Information — 5. Qualification and Consent of Experts” in Appendix VI to this
prospectus;
(k) the PRC Company Law, Securities Law, and the Trial Measures for the Administration
Related to the Overseas Securities Offering and Listing by Domestic Companies,
together with unofficial English translations thereof; and
(l) the terms of the 2024 Equity Incentive Plans.
DOCUMENT A V AILABLE FOR INSPECTION
A copy of a full list of all the grantees under the 2024 Stock Option Incentive Plan will be
made available for public inspection at 40/F, Dah Sing Financial Centre, No. 248 Queen’s Road
East, Wanchai, Hong Kong during normal business hours up to and including the date which is 14
days from the date of this prospectus.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– VII-2 –


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(A joint stock company incorporated in the People’s Republic of China with limited liability)
Stock Code : 3268
Sole Sponsor, Sponsor-Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
GLOBAL  OFFERING
MeiG Smart Technology Co., Ltd.
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MeiG Smart Technology Co., Ltd.
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MeiG Smart Technology Co., Ltd.
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